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Zero Hedge had an interesting post yesterday, which I followed to http://imperialeconomics.blogspot.com/ and found Blogger had been busy doing some interesting analysis.
Coppock-DJIA-2011-0324.jpg
The Coppock Curve analysis depends on multiple moving averages to do wave analysis of the stock market (see http://en.wikipedia.org/wiki/Coppock_curve ). I added the big red letters "A", "B", and "C" to propose some questions and postulates.
Below "A", we see the red curve for Sept. 2005 separates from the other two Coppock Curves (1870, 1920, 1986), most likely due to significant intervention by the Federal Reserve, Treasury, Wall St., et al.
It appears that they stopped the economy from suffering a much worse recession than what would otherwise have occurred, as indicated by the historic Coppock Curve. Greenspan was a success, as far as the short term theory goes.
We have the saying, "Kick the can down the road". Perhaps Greenspan wasn't as successful as the self-congratulating Maestro (and everybody else) thought he was. Notice to the right side of the "A", we missed out on a very strong market, then at "B" the recession and market crash was far worse than what would have been indicated based on the historical Coppock curves. Again at "C", we have a market recovery that fizzled when we compare it to past robust recoveries that the Coppock Curve says we should have had.
Here is my theory: I propose that the area under the curve that Greenspan diverted below "A" is smaller that the sum of areas to the right of "A", at "B" and at "C". This means that Greenspan, with all his meddling, only succeeded in delaying the inevitable, and we ended up paying far more in the end (ie. interest on the delay).
Here's another point. At "C", it appears that our Coppock Curve of today is attempting to diverge from the market crash we would otherwise be having right now. It seems Bernacke et al. wants to skip horizontally for 2.75 years, and go right into the next boom cycle, for now and forever more.
This happened before, back in Sept. 2005 (ie. "A" in our curve). With the wave patterns in our near future, Bernacke will have to make it all the way to Jan 2014 without a single slip. One slip, and over the cliff we go. Can he make it?
As a teenage boy and young man, I learned to dance on the stones along the waterfront. After a while, I got pretty good. I kept picking up the pace, and soon I could run full speed with much fancy footwork. People liked watching me do this, and I enjoyed entertaining them. One day, a rock had a little bit extra slime. I lost traction unexpectedly, slipped and fell hard, hitting my head on a rock, almost knocking myself out. My wife was scared to death. As soon as she was assured I'd live, she started yelling at me about my stupidity. My rock dancing days were officially over.
Is it possible for Bernacke to make a perfect performance for another 2.75 years?
Yea, it's possible.
Will he actually pull it off? Not likely.
He, or someone else in his stable will be distracted, or over compensate at some point.
Bernacke is going down. He'll take us all with him. It's only a matter of time.
Delay as he might, the market is doomed, and so are we. We might as well stop now and take our punishment for all our past sins. Running from Fate only pisses him off even more, doubling the punishment that all of us will eventually suffer.
Coppock-DJIA-2011-0324.jpg
The Coppock Curve analysis depends on multiple moving averages to do wave analysis of the stock market (see http://en.wikipedia.org/wiki/Coppock_curve ). I added the big red letters "A", "B", and "C" to propose some questions and postulates.
Below "A", we see the red curve for Sept. 2005 separates from the other two Coppock Curves (1870, 1920, 1986), most likely due to significant intervention by the Federal Reserve, Treasury, Wall St., et al.
It appears that they stopped the economy from suffering a much worse recession than what would otherwise have occurred, as indicated by the historic Coppock Curve. Greenspan was a success, as far as the short term theory goes.
We have the saying, "Kick the can down the road". Perhaps Greenspan wasn't as successful as the self-congratulating Maestro (and everybody else) thought he was. Notice to the right side of the "A", we missed out on a very strong market, then at "B" the recession and market crash was far worse than what would have been indicated based on the historical Coppock curves. Again at "C", we have a market recovery that fizzled when we compare it to past robust recoveries that the Coppock Curve says we should have had.
Here is my theory: I propose that the area under the curve that Greenspan diverted below "A" is smaller that the sum of areas to the right of "A", at "B" and at "C". This means that Greenspan, with all his meddling, only succeeded in delaying the inevitable, and we ended up paying far more in the end (ie. interest on the delay).
Here's another point. At "C", it appears that our Coppock Curve of today is attempting to diverge from the market crash we would otherwise be having right now. It seems Bernacke et al. wants to skip horizontally for 2.75 years, and go right into the next boom cycle, for now and forever more.
This happened before, back in Sept. 2005 (ie. "A" in our curve). With the wave patterns in our near future, Bernacke will have to make it all the way to Jan 2014 without a single slip. One slip, and over the cliff we go. Can he make it?
As a teenage boy and young man, I learned to dance on the stones along the waterfront. After a while, I got pretty good. I kept picking up the pace, and soon I could run full speed with much fancy footwork. People liked watching me do this, and I enjoyed entertaining them. One day, a rock had a little bit extra slime. I lost traction unexpectedly, slipped and fell hard, hitting my head on a rock, almost knocking myself out. My wife was scared to death. As soon as she was assured I'd live, she started yelling at me about my stupidity. My rock dancing days were officially over.
Is it possible for Bernacke to make a perfect performance for another 2.75 years?
Yea, it's possible.
Will he actually pull it off? Not likely.
He, or someone else in his stable will be distracted, or over compensate at some point.
Bernacke is going down. He'll take us all with him. It's only a matter of time.
Delay as he might, the market is doomed, and so are we. We might as well stop now and take our punishment for all our past sins. Running from Fate only pisses him off even more, doubling the punishment that all of us will eventually suffer.
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