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Thank you for your many emails. As anticipated your comments had two things in common. Firstly you all had strong views – in a frightening sort of way. Perhaps this was because all emails were from males – and perhaps alpha males? Secondly none of you had the same point of view. That says it all. So please no more emails telling me we are in a raging bull market or the world is about to fall apart.
You mostly told me how wrong I was and that’s cool as I don’t write to have you agree or disagree. And I don’t write to be right. I am only interested in making money – in my own way. As the African American novelist Willard Motley wrote, ‘Let no man write my epitaph’.
One of the emails was from Jim, who comments ‘…the 150 day Elliott Wave of the all Ords suggests the Fed thinking is they won't cut rates. I'm fascinated in how technical predictions of the stock market have coincided to the exact day with major political events. Does one cause the other or is it coincidence….’
Jim, you raise a couple of extremely interesting points here. Firstly bonds and equities traders are living on different planets right now and could not be further apart. Share investors are partying like never before whilst the bonds dealers are pricing in doom and gloom and hence there is a need for a rate cut.
The other point you raise is sort of what comes first, the chicken or the egg. Whilst I am an avid technical user my view is that technicals must track the fundamentals over the longer term. It may well be that they will decouple for short periods and you are right that this could be one occasion when there is still some question as to whether the USA Fed will cut rates on September 18. I know that many of you Alphas believe the world falls in behind some of the technicals such as Gann, Elliott and Fibonacci but as I am in enough hot water already I will accept there is another point of view.
Barring no further emails or a dramatic change in the market outlook I am going to leave this topic behind if I can and move on next week.
To all readers around the globe we are bringing TTN to you a day earlier as there is an APEC lock down here in Sydney and we have been granted a long weekend. I need one as I am exhausted idling on the sidelines.
Enjoy the ride!
Tom Scollon
Chief Analyst
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