Bear Market Rally for Broad Markets

Strategy:

Until proven otherwise, this is a bear market rally for the $INDU and broad market averages and the next BIG MOVE in the market is down. I look for junior gold stocks to bottom out soon and have a huge run over the next 24 months. I will wait until MFN P&F chart turns bullish. Fcx and gold bullion P&F charts are bullish.

FCX P&F GIVES BUY SIGNAL

Remember our two leading indicators? FCX signals a reversal and new bull market for precious metal shares. MER indicates continuing bear market for broad financial markets. A strong down market signal is given for tomorrow by Palasades Research. Today was Palasades first wrong market forecast since July 28th. This is an incredible free market forecast giving probability predictions for the next market day. (see first link)

IBD MARKET UNDER PRESSURE

DEFLATION WATCH

Defaults on corporate debt are ratcheting up as economic weakness takes it toll on the financial health of companies.

The global default rate is expected to climb to 6.3 per cent over the next 12 months and it could reach 10 per cent should the US sink into a protracted recession, Moody’s Investors Service said on 8 August, 2008. Source:Financial Times

Corporate debt default ‘could hit 10%’
By Nicole Bullock in New York

Published: August 8 2008 01:28 | Last updated: August 8 2008 01:28

Defaults on corporate debt are ratcheting up as economic weakness takes it toll on the financial health of companies.

The global default rate is expected to climb to 6.3 per cent over the next 12 months and it could reach 10 per cent should the US sink into a protracted recession, Moody’s Investors Service said on Thursday.

BROAD MARKET DISTRIBUTION DAY

Wednesday's session marked a distribution day for the NYSE indexes. That result ran the count to three distribution days for the Dow, S&P 500 and NYSE composite since the market followed through on a new rally SINCE 7/29/08 follow thru rally. Short tern I remain bullish for ndx and S&p for tomorrow. I had a nice 24 hr trade on GDX options today making 99%. I still look for gold to test $750.

Gold continues lower

http://cotstimer-how-it-works.blogspot.com/
COT's gold setup returned 661%
Georgia-Russia conflict fails to lift gold so far.

HOW LOW FOR OIL AND GOLD?

I have been following Palisades Research a free posting that gives a daily forecast for the S&P 500 and Nasdaq 100 indexes. (see link)
I think we will have a trading range market thru August and September and then correct to a new market low. Support is shown for oil, gold and $INDU.

Good luck and God bless.

As some of the readers of this blog know I love to golf. Today on hole 18 our 4-ball match came down to the final putt--I kept a poker face when both our opponents missed their 8 foot putts. So my partner and I won with the bets pressed 3and 1. I continue to work as a full time Ear Nose and Throat surgeon. For me the golf course is a "Pleasant Distraction" or is even more? One of my regular foresome partners(An OBGYN Doc) says, "A round of golf is far better than a Prozac."

I have been reading The Practicing Mind (Bringing Discipline and Focus Into Your Life)

http://www.amazon.com/Practicing-Mind-Bringing-Discipline-Focus
/dp/0977657205/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1218247262&sr=8-1

DISTRIBUTION DAY FOR BROAD MARKETS

A distribution day occurs when at least one of the major indexes closes down in higher volume than the prior session's level.

The increase in volume signals selling by mutual funds and other institutional investors — the market's principal driving force.

Friday I took profits on BVN. If we get a little rally in PM stocks HL could be a good short also. Will gold correct all the way down to 750?