Sunday, Feb 15, 2009
Cash is King?
Cyclesman: August 21, 2008 Interview with Robert Prechter
For entertainment only....[so the website says].
Dow theory versus Elliott wave versus K-Wave - but who is right? And when will the cycles bottom......
Cash, Gold, Commodities, deflation, "liar loans", weimar republic, china, denial, house prices and other good stuff... August 2008. Also proves that no-one is right all the time.
Only one way to find out..... sit back and turn the speakers on.. Have a good day of rest before some fireworks on monday - or will we have to waifor those nasty Americans to come back on Tues?
Posted by techieman @ 02:06 PM (1031 views) Add Comment
21 Comments
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1. little professor said...
can we get a bit more explanation, techie? Who is this guy? And what fireworks are you expecting on Monday? All very intriguing.
2. titaniccaptain said...
Link doesnt work for me techie.......would also like to know what you think is going to happen on monday
3. mountain goat said...
USA has a holiday on monday I believe, thought that kept markets quieter than usual.
4. techieman said...
Cyclesman is a technical man that specialises in K wave analysis and Dow theory, Pretcher is the Elliott Wave bloke who produced a book called conquer the crash in 04 ( i think) which predicted the demise of MBS' and the onset of a bear market and deflationary depression www.elliottwave.com.
I must admit I am biased because i read the definitive Elliott Wave book in the early 90s and was hooked. [even though some argue that you can move the goalposts to render it useless - i dont agree]. The book showed that a major turning point was due in 1987 even though it was published in 1978.
As for Monday, its a technical issue. If the FTSE 100 breaks around 4080 to the downside im banking on the end of range trading on our way toward testing last years lows. The US markets closed on their lows after (assumption) shaking out the bears with a vicious short covering rally previously.
5. techieman said...
MG yes - thats why i said "or will we have to wai[t] for those nasty Americans to come back on Tues?!" and TC i dont know why it doesnt work - i assume the mp3 works for everyone else?
6. little professor said...
Yeah, mp3 link works fine for me. Will listen in the car tomorrow.
7. titaniccaptain said...
Maybe we cant get mp3 reception here in wales
8. paul said...
You have Internet in Wales?
9. hpwatcher said...
To download, right click on the link and hit ''save target as''
If the FTSE 100 breaks around 4080 to the downside im banking on the end of range trading on our way toward testing last years lows. The US markets closed on their lows after (assumption) shaking out the bears with a vicious short covering rally previously
Could you please be more explicit about what you mean? Are you saying the markets will go lower?
10. denzil said...
Don't really get the comment, "cash is king".
With quantitative easing, not months but probably weeks away, there is a real danger cash will become worthless overtime, due to a rapid swing from deflation to hyperinflation.
For those that have STR, there IMVHO is a likelihood their deposits will lose value over time.
With Brown's chances of a win at the next election, going down the pan faster than a dose of the Delhi belly, I fully expect the printing presses to be ran flat out. That could generate a feel-good factor and Brown will call a snap election.
There's no lengths Brown will not go to. The psychology of the man is flawed.
11. jack c said...
@techieman - the link works fine for me - how old is this broadcast? - the reason I ask is that the low's talked about on the DJIA have already been breached.
For the FTSE 100 to break the 4080 barrier we need a drop of approx 110 - I suspect the market will take a hit on Monday led down by the banking sector - Lloyds Banking group expected to be the biggest faller.
Boy these guy's are real bears - market to bottom 2014-2016 !!!!
12. titaniccaptain said...
@paul
Yes and we can play rugby :-)
13. mountain goat said...
Denzil this is what Pretcher thinks about cash being king.
14. techieman said...
Denzil you need to listen to the interview it deals with this and the weimar republic. Obviously the comments are aimed at the US but the issue is the same, as i have said before "we" have an inflated view of what politicians can actually do here (although not as inflated as their own). Eventually you may very well be right but thats once the effects of the deflation have been fully felt - if you look at the numbers on the link detailed above by MG you can appreciate the numbers involved.
In short Prechter says that you can't have deflation in an economy based on purely purely printed money, (eg Weimar republic) but you can when you have massive leverage through credit. The inflationary and deflationary impacts are then based on a switch being switched from optimistic to pessimestic. Mr P has always admitted at been too early on his predictions as to when that switch would be pressed, (and has been vilified for it) but now.....
Denzil - you seem to think that we can hyperinflate out of this as quickly as we got into it.... IMO we cant . IF there is to be hyperinflation at some point then this will show up in the markets at some stage before it becomes "known" by everyone. In the meantime you may wish to do some pound cost averaging purchases on some commodity funds rather than stick in a load now and see that continue to decline.
Jack c - you mean in 2014 - 2016 as opposed to that being the bid offer spread on the Dow (their actual forecast for the dow is scarier than that!) . The broadcast was August 21st 2008. [the title of the link :-)]
hpwatcher - there is (upward sloping) trendline support at 4130. 4080 then represents a 61.8% retracement of the move from 3700 to 4690, 4080 is also slap bang in the middle of alot of market action. If it breaches 4130 to the downside it should rapidly get to 4080, and if it breaches that then yes it goes lower. Is my view that these suport areas will be breached to the downside - yes! Could i be wrong? Of course! But over the last few days i reversed from long to short and built up my position when we had the rally on thurs / frid (went more short). Do i say they WILL go lower - no i dont KNOW i THINK they will go lower and am willing to take some risk that they will.
If 4340 is taken out to the upside then we would look to re-test the 4690 high. A while back i said that after the big falls we would get choppy trading, I now think thats over and we will see downside but yes nothing is certain and if i am wrong this time then i will happily lose money so long as i can have another bite at the bear cherry. If it goes higher than where we are now next week then its highly probable i am wrong.
As for the rugby (not a fan) but i thought it was a good game - and clearly the best team (on this occassion) won.
15. jack c said...
@techieman - thanks for the response - Sunday evening on the Grolsch and HPC for me obviously dont go together - r u long or short on how many bottles I'll drink tonight (LOL)
16. techieman said...
np Jack c - im into the cava / whisky spread myself... although not on a Sunday night!
17. titaniccaptain said...
@techie
Im not a rugby fan either.....infact im not welsh either by birth or blood...lived here most of my life.....call it an underdog thing.......and yes techie hand on heart thanks for your comments today....I think I speak for most of us when I say you are one of the greatest insights into the mechanics of our financial system on this site.......so thank you......one day I will abandon my intellectual laziness to debate with you from a more informed position...until that day...........
18. techieman said...
TC - you sure you are not on the Grolsch too? Thanks for the compliment in all seriousness but i wouldnt go that far... in my world you are really only as good as your last trade! It would be sods law if afer all this the market went through the roof tomorrow :-). I honestly have made some crap calls on the markets so i do sometimes hesitate to post. I've just read stuff, some makes sense to me and some doesnt. I am not anywhere near the intellect of some of my peers and the reason i post here is mostly to see what others think.
I started working on the stock exchange as a jobber of traded options - when they had a floor in threadneedle street next to the BoE. THE most important thing anyone told me was this:
Always take a view on the market - you will be wrong often but you have to learn why you are wrong. Its great advice .... you learn more about yourself through trading than anything else i have ever done... you learn to take it on the chin and you realise that you are often wrong but start to realise why you are wrong and then start to become more right. It reminds me of the series "Kung Fu" when the master says "now it is time for you to leave".
Thats when IMO you trade on your own and find another new learning curve associated wioth different pressures. I am glad that Flashman has appeared although his calls on the market are different in as much as he will probably make a few pips in the ForEx markets for "size" whereas i am happier to have longer term timeframes (unless of course i get stopped out quickly).
Thanks again though TC - i appreciate the comment.
19. sold out said...
Is there an 18-20yr cycle for when Wales beats England at rugby (or any other sport)?
Was it 1978/79 when they last beat us?
20. sold out said...
1988 Wales won 11-3
I think i am on to something here.
Wales beat England just before a major correction in the housing market.
Thanks TC.
I think we may have found a new system to compete with K waves and Elliot Waves.
21. denzil said...
MG & techie. Thanks for the info.
I'm certainly not thinking that deflation will switch to hyperinflation rapidly but it will occur overtime. Trying to predict the timing of that switch is impossible at this stage. However, I don't believe deflation will be as severe as some are predicting, so I'm not so sure how long the reign of King Cash will be.