Wednesday, June 30, 2010

Secular Chart Porn With Stochastics

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I believe the unthinkable is going to happen. My guess is that the March 2009 lows will hold as well for major stock markets as they did for Greece (i.e. they won't):



I am black-bile bearish on equities to the point where I am nervous about Gold stocks here. That's very bearish for me, as I am well aware of the tendency for Gold stocks to largely decouple from equities as they did in the 1970s and 1930s. In keeping with the theme that a picture is worth 1,000 words, here is the paperbug secular nightmare translated through the eyes of someone who has managed to break through the propaganda to the other side of the matrix (21 year monthly log scale Dow to Gold ratio candlestick chart porn with stochastics):



And the path for the stock markets of major economies is being led by China, which is in the same precarious position as America in the 1930s, while we are more like Britain if one wants to look to the 1930s for answers. We ARE NOT EVEN CLOSE TO THE AMERICA OF THE 1930s and any direct comparisons are apples to oranges. Here is the Shanghai Composite ($SSEC) on a monthly 20 year chart to show some more slow stochastic secular chart porn related to what comes next for those not overly concerned with the day-to-day squiggles:



Long physical Gold, short general equities. Biased as can be due to established positions. The Dow to Gold ratio will reach 2 before this cycle is over and we may well go below 1.

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