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This morning on Crapvision-Europe they had some technical problems and almost didn't show the interview with Oyster. They finally managed to arrange a connection and have him present - but they were running out of time, so he spoke rather fast and, I think, didn't say everything he wanted to say. Also, because of the speeded up presentation, I couldn't remember everything. Nevertheless, here is a summary to the best of my recollection; Oyster, if you read this, I'd appreciate if you could correct any mistakes and omissions of mine.
First, he is rather bearish on the US dollar. Expects euro/dollar to reach above 1.20 (I didn't remember the exact numbers) and dollar/yen to go much, much lower, with 100 being just the first stop.
Then he showed a chart of the SPX in Japanese yen, demonstrating that it has already broken back inside its multi-month trading range, after the false breakout:
I'm not quite sure what was the point of this.
After that, he commented on the "real" SPX, starting with a weekly chart:
He pointed out that the index had almost reached its 200-week EMA and/or the 38.2% Fibonacci retracement between the all-time high and the October 2002 low. However, it has been turned back before exceeding these levels. His Elliott Wave count is shown on the chart above. He thinks that a wave C down has just started and that it will be of equal length as the preceding wave A - i.e., that it will take the SPX to new bear market lows (i.e., to 1040.3 - (1177.0 - 768.6) = 631.9). He said that if he is wrong, this will be shown by the SPX rising above the recent high (1040). However, he said, if it falls below the critical support of 965, we can kiss goodbye the hopes that a new bull market has begun.
He then displayed a daily chart of the SPX, with more precise support levels but, unfortunately, I don't remember it.
I think it was expecting the first serious bear market rally to start at some Fibonacci retracement (38.2%, perhaps?) between the October 2002 low and the September 2003 high; possibly in the December-January period.Finally, he said something about the DAX, which was similarly bearish, but I don't follow this index, so I didn't remember it.
While I agree with his bearish bias, I disagree with some of the details. Yes, new bear market lows will be reached - eventually. But it won't happen any time soon. After such a strong rally as the one we've had since the March lows, people will not give up easily. All those who have missed the rally will consider every pull-back as a buying opportunity. It will be a long and painful slide. On the first try, I don't think that even the March lows will be broken, let alone those of October 2002 (although I am thinking mostly in terms of the COMPX here; not of the SPX). However, given that I've been wrong in my analysis of the broad market pretty much since May, perhaps you shouldn't attach too much importance to this opinion of mine.
Regards,
Vesselin
P.S. My access to this site has been very flacky lately...
Somebody between verio.net and wadoo.net is dropping packets like mad.
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