Interesting recent action on coles, cml shorts.png
Shorts furiously buying back their positions, three days later, Aug 18,
we see the private equity bid.
Tiger Woods, how would you be. In his most recent round last week, he
had 4 bogies in a row on the front nine - his worst performance in over
ten years. Like some problem to have eh.
Essendon have had itís worst season since 1933. 72 seasons, 73 years
forward. Emotional for them no doubt. I don't share the emotion here
myself. Thanks to Paul for highlighting that one. Whilst on that count,
did I mention already, if i have my history correct, that one of the all
time high prices for gold occurred in 1864, when price went to $42.02 on
war news in the US (US civil war). Add 144 to that, Gann's most
important number... 2008/09 is a'gonna be emotional.
72 years from 1864 was 1936, very close to the time the price of gold
was deliberately lifted by the US government to $35 an ounce to create
inflation via lowering the dollar's purchasing power, to get the economy
out of depression. (Didn't work.) US citizens were then forbidden to
own the stuff and forced to hand over anything they owned. Emotional
years then for the metal too.
Similar can be said for oil, tho in 1864 uses for the black gold had
only just been discovered. However, if we take 2009 for oil as a
possible date / high emotion peak and count back 72 years we get 1937,
additionally to what I have forwarded in earlier emails about oil. War
clouds were gathering then and all knew oil to be the critical resource:
access to it would help determine the outcome of the war if there was to
be one. England's supplies came from Trinidad. In 1936 Bolivia had
seen uprisings, riots in fact (observe what's going on now) in its oil
fields, which spread to Trinidad where worker exploitation had reached
new lows. Emotions peaked 19th June 1937 when Warships and 2200 well
armed soldiers arrived to enforce English rules of labour and protect
the ('its own by rights of conquest') resource base. Unrest spread to
Venezuala in 1937(again the link to present days so in 2009 these areas
will see repeat emotion) and then Mexico 1938 whereupon that state
proceeded to nationalize the industry.
The English enforced news black outs in Trinidad, so the locals
communicated the oil news orally by singing it around the countryside,
making famous what became known to the rest of the world as 'calypso'
music. If you want to read more about that, see the chapter "Oil, Race
and Calypso in Trinidad and Tobago, 1909-1990" by Graham Holton, in the
book "Latin American Popular Culture: an Introduction", William H
Beezley. (Some of you will have met Graham presenting at some of my
classes in the past.) Anyway, riots spread also to the copper-belts of
Central Africa, hence watch copper prices for peaks 2008/9 also.
Emotional years. Time around points of the circle.
Don't you love the comments we get to hear from punters on the Telstra
share price, some of it like - "seems cheap to me". Well sure it is,
but trend is down. Never buy a share below the moving average. Shows
you how little the average punter knows about markets. Better profits
are in stocks moving into new highs, at least for those on the long
side. Sure you might be able to buy in at the bottom for TLS, but on
such patterns price has to go sideways a long time before going higher
again. Buy high to sell higher is the more profitable strategy.
More on the fashion thing:
perusing thru a few fashion mags of late, I noted the new French
designer sensation Hedi Slimane of Dior Homme fashion label. He
describes his style as a mix of social and street fashion: "hedonistic
party clothes." Hey, I went thru the same style myself 1986 to 1989.
Historically, the hedonism so typical in the last years of the real
estate cycle have always ended badly after the 18th year.
To the indicators:
rule of 20 - the market is not looking in collapse territory
historically speaking. Present prices are supportable on fundamentals.
yield curve barometer - the Australian curve has gone flat, and no
longer clearly inverted, as anticipated earlier by EIS. Signals a
slowing economy ahead, or at least no longer growing as strongly as in
the past. Nothing to worry about here either presently, and gives room
for asset prices to inflate further over coming months. I would say
however that the situation Australia faces is slightly different to that
of the US. We could see US rates decline a little whilst Australian
rates don't move or go up slightly more. The strength of the
commodities may help determine this outcome.
Note again, we never get the truth form government representatives.
You watch, when the average American begins to feel the pain of
declining land prices, opinions about all this will change, and the
public will bay for blood over all the expenditure and corruption.
We were taken to war on absolute lies: that Saddam had an
arsenal of weapons of mass destruction, that he was assembling nuclear
reactors, that he was a threat to world safety. He didn't and he wasn't.
You must stay aware of this all the time now, as the lies apply equally
to the stock market. Sun Zhu i think it was, in his book The Art of War
said it best: "All war is deception" he said, and this is true. Same in
the markets: by this I mean, for example, if bad news is released but
the stock forms a higher bottom, it means the news has already been
discounted and the market is looking further ahead. Gann teaches you
what this means and how to trade it.
It is why you MUST have at your disposal, charts of your stocks, and
learn to interpret what they mean. The chart tells you the truth - I am
certain this is why Gann called his first book "Truth of the Stock Tape"
Emphasis on the word truth, in my view. In Gann's day, insider trading
was legal and artfully practiced by insiders.
This leads me to a few other things, my own tribute in particular, to
I was lucky enough to have heard a number of his both public and private
speeches over the years. I appreciated his passionate belief in
individual rights (I would rather say we have individual
responsibilities, rather than rights, but that's another story) his
belief in free enterprise and small business, his idealism and his
absolute honesty. Rare in a politician - in fact utterly non-existent
these days. The Age obituary had it quite right in acknowledging his
belief that idealism is the only way forward for politics in a civil
society. All his speeches that I was privy to were unforgettable. I
contested once the seat he held in the House (the seat of Hotham, out
Oakleigh way). The party he formed was committed to governing without
allegiances to outside influences. I can tell you the Party held true
to that idealism, sometimes under great pressure from outside sources.
I went on to discover that those government granted licenses, the
largest of which is land value, is the corrupting influence.
These days politics is sorely lacking a little idealism. Our present
ruling morons have permitted Mr bin Laden to create a situation where
governments are usurping our human rights and values. This is not bin
Laden's fault, it is ours. Fear rules only because we permit it. Other
idealists knew this:
"Of all the enemies to public liberty war is, perhaps, the most to be
dreaded, because it comprises and develops the germ of every other. War
is the parent of armies; from these proceed debts and taxes; and armies
and debts and taxes are the known instruments for bringing the many
under the domination of the few. In war, too, the discretionary power of
the Executive is extended; its influence in dealing out offices,
honours, and emoluments is multiplied; and all the means of seducing the
minds, are added to those of subduing the force of the people Ö [There
is also an] inequality of fortunes, and the opportunities of fraud,
growing out of a state of war, and . . . degeneracy of manners and of
morals . . . No nation could preserve its freedom in the midst of
That from the voice of James Madison, April 20th, 1795, one of the
founding fathers of the US Constitution.
We are not learning from history are we ? Collective economic
structures and our thought patterns remain the same, so be assured
history will repeat. Watch now as we head into the Nov 7 Congressional
elections for US leaders to ramp up the 'fear' rhetoric a decibel or
five, elections the right wing Republicans must win to continue their
agenda and also not risk congressional delving into their activities by
a newly controlled democratic congress. They understand exactly what
they are doing do these guys.
This all coincides this month with the 5 year anniversary of 9/11. Gann
would not have taught it that way; he would have had his students think
degrees of a circle - 60 degrees in months, two-twelfths. Observe
already the lift in emotions, as can be exactly forecast straight after
the event: attempted attacks by muslim fanatics, new obl video, defense
by non-muslims and western governments, US, UK and Australian leaders
upping the consequences of 'not giving in', TV and video specials, film
releases and on it goes. Same old same old.
Next counts, 72 months (half 144), 84 months (360 weeks), 90 months
being March 2009 (not forgetting counts off 7/7/05 now as well) and so
on around the circle. Eighths, twelfths, thirds and quarters.
Anyway, Don Chipp died 30 years from his life's most pivotal public
moments of 1976/77 and the formation of the party he founded. The
emotional pressures rest in those squares, trines and angles of the
circle that is life is what W.D. (re)discovered. Thank heavens he wrote