Reading the tea leaves; July 20, 2009

Stock Market pundits follow a number of indicators to try to forecast the moves of the Market. Uncommon Wisdom had partnered with an organization that charts the movement of many things and attempts to develop formulas for these. You can check out how well the cycles are followed by the actual Market. Not too well, as it turns out, but there is quite a bit of predictive ability to this method.

So, what do these tea leaves tell us?

The S&P 500 rallies from a bear market low and spends 2-3 months trading sideways. Then it goes up again. This second leg is almost upon us. In fact, we maybe in it. Pundits cite the accumulation of cash and the improvement of profits as driving forces. Goldman Sachs predits a move of the S&P 500 to 1000. The cycle theory predicts a cycle top in April for the DOW. A crash will bottom out late 2012.

The dollar is weak, but this weakness is hidden by the fact that the Euro is even weaker. The Obama regime relies on cheapening everyone's dollar holdings so they can rescue the banks from the consequence of "mark to market.' This, in fact, robs the world of some of their property. Socialists always commit the crime they accuse us of doing; in this case robbing the world.

Gold will begin a rally this month and reach a high in 2010 April, dip and reach its high in 2010 August.

The economy and the Stock Market will recover in 2013, presumably after the Obama regime is gone.