B4 The Bell Humpday

[Guest yobob1]

Not sure but the Yen looks to have made a new high against the dollar - if not it's close. Dollar basket - steady. Yield on the 10s at 4.08. PMs quiet. Nikkei practicing for cliff dive at Acapulco, down 194 - seems like only yesterday it was over 11,000. Europe playing a good little lap dog, circling by the door wanting out. Tech heavy Dax showing the way down about 1%. Somebody overslept - no 3:00 AM bounce in the futures. Beware the sucker punch - drop and pop or drop and flop?

 

Bird flu is gaining ground - this years SARS? US now refusing overflights by Chinese homing pigeons. Warns all alien pigeons will be shot on sight.

China's strident campaign on the disease has also begun to crimp the lifestyles of the nation's bird buffs. Beijing Zoo shut part of its bird garden and millions of homing pigeons reared by city folk were grounded, newspapers said.

China grounds homing pigeons

[DrStool]

Good morning! The End emailed me this question.

 

"Is it plausible that the 18,36 and 72 year cycle lows where hit in Oct. My answer is no but I would appreciate yours in a public forum."

 

Unfortunately, I am not a student of long waves. Kuznets, Juglar, Kondratieff etc. I had always thought the Kondratieff was a 60 year cycle. I've heard some people mention 54 years. If there are cycles with those nominal lengths, it would seem to me that July 1932 and year end 1974 would be benchmarks. On an inflation adjusted basis perhaps 1982 would be one. The difference between the two benchmarks is either 42 or 50 years. None of the aforementioned cycle lengths would fit in that space in any meaningful way.

 

Then you have the period from 1974 to 2002, or 1982 to 2002. 28 years and 20 years. These periods again do not fit the nominal periods which The End mentioned.

 

I think if you look at the current environment, most of us would agree that there has been a bubble, both in stocks, and in the general financial environment that has continued right up until recent weeks. I think it's fair to say that bubbles do not appear in the early stages of any long wave. They come at "The End."

 

I also doubt that there is any set periodicity for cycles longer than 4 years. The 4 year cycle, or 3-4 year cycle, can clearly be seen, going back 100 years or more. As cycles lengthen the wave band width also widens. For practical trading and investing purposes I think the 4 year cycle is the only one that really matters. What difference does it make if the the secular trend channel on the S&P has turned flat, or even slightly up, if the band width is 300 points, the half cycle crossing period is two years, and the market is currently near the top of the channel?

 

In my view the market has all but topped out, and the next two years will be bearish. If the secular trend channel is flat, or up slightly, then the market won't break or even get all the way back to the 2002 lows. Another thing to consider is the fact of ever increasing long term volatility. The wave band keeps widening. This rally may have been nothing more than that. If that's the case, then the secular trend might still be heading down. I just don't know. Once the market is one third to halfway through the next down phase, we'll have a much better idea of where the ultimate target is. For now, let's just get this top complete.

 

Here is the current long term cycle picture as I see it. It is published weekly in the Anals. I invite everyone to support The Stool by subscribing.

 

I thank The End for his support through the years, and for raising this question, so that those of you who are not subscribers can get a sample of some of Doc's thinking.

 

And now, On With The Show!

[Guest Icky Twerp]

Wow! Dok! What a thoughtful answer!

 

Now I know what I'll be doing all day, parsing this sumbitch

 

My question, I guess for the Big E, is that we see variation in the shorter cycles, so what would be proportional & viable duration variability in such long cycles. Also, have you made a stab at correlating the current market to any identifiable super-cycles?

 

I reckon B4 the Bell is where I'll be while this downturn occurs, where else would a Bear want to be?

[Guest Icky Twerp]

Houston is bracing for 24% rise in health care tab

The cost of providing health care to city employees, retirees and dependents is expected to jump by $40 million during the next fiscal year, mirroring a nationwide trend, a city official warned Tuesday.

 

Although the city of Houston has absorbed the full brunt of such increases previously, it can no longer afford to foot 88 percent of the cost, said Chief Administrative Officer Anthony Hall.

 

"It is the administration's position that that has got to be adjusted," Hall told the City Council's Fiscal Affairs Committee. "The issue we have to deal with is, who pays what? Employees are going to have to face the fact that they are going to have to pay more."

 

The expected 24 percent increase, from the current $170 million to $210 million, is for the fiscal year starting July 1.

 

Soon these chickens will come home to roost.

 

The failure to address this issue successfully in 1993 will haunt us. The threat of Hillary-care depressed health-care costs for several years, but now the cap is off. The choice to disembowel reform instead of working together was short-sighted partisanship. It does not bode well for Social Security, either.

 

Or, possibly being herded into flaming pits of diesel fuel will take everyone's mind off their poor health.

[Guest Icky Twerp]

China roams world to secure oil supply

DAKAR, Senegal ? The West African nation of Gabon isn't one of the world's more high-profile countries. So why a full-out state visit by China's leader?

 

An easy answer: oil.

 

Burning fuel at a record pace to run an economy in overdrive, China since late 2003 has claimed the No. 2 spot in world oil imports, second only to the United States. And jostling with the world's other oil gulpers to keep their machinery moving, China's leaders are looking far afield for a secure oil supply, locking down tough-term deals with easy-term cash.

 

....

 

And back in China, the economy, booming at 9.9 percent annually, with business and family-car ownership surging despite fuel supply-line kinks that had power plants sputtering, is waiting to see what Hu brings home from his oil trip.

 

China, with oil demand shooting up by 10 percent last year and oil imports up by a record 30 percent, is driving global demand ? hard.

 

"It's sucking up a lot of the world's oil resources," said Antoine Halff, demand specialist at the International Energy Agency. "It's a large market and steep growth, and it's not getting the oil it's looking for."

 

Until very recently, China, like the West and Japan, largely had been looking for oil imports where everyone else was: the Middle East, source of 60 percent of Chinese oil imports. But increasingly, the world's powers are questioning the wisdom of leaving national economies to rest on the explosive region.

[The End]

Tanks Doc.

 

I appreciate your response.

[DrStool]

Gold and HUI Bottoms

 

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[Guest]

I had always thought the Kondratieff was a 60 year cycle. I've heard some people mention 54 years.

Excellent article on Kondratieff cycles complete with pie chart..

 

http://www.financialsense.com/transcriptions/Gordon.htm

 

"Kondratieff was a Russian economist, one of the leading Russian economists during the 1920?s. He basically undertook a study of capitalism in which he formulated that the economy ran through a long cycle of expansion and then contraction. The cycle was approximately 50 to 60 years in length. He did it by going back, really, to the dawn of the industrial revolution about 1789 and looking at things like the movement of capital, prices and international trade movements."

[brian4]

Good morning gang-on your toes-the open is a turn lasting 45 minutes may the force be with us-helmets on.

[brian4]

cubes will open roughly 30 ticks off the close-wowza

[DrStool]

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Fine tune your timing! Stooltrading is the place! Join your fellow stoolies sharing charts, trading signals and ideas! Doc gives his commentary as well, with illustrations of intraday cycles throughout the day with projections for highs, lows, and cycle time turns for the SPX and QQQ. He also gives cmap targets for individual stocks by request. Become a Stooltrader and join the fun!?

[brian4]

stop 1135

[brian4]

top of the hour and still in the window is the ISM report.

[MyGoldenStool]

top of the hour and still in the window is the ISM report.

Beat by a penny?

[soup]

We need a close Below 1119 to take any comfort on the short side. Today is as good as any.