Hello MarketClub members everywhere. World bankers met at their August retreat this past weekend in Jackson Hole Wyoming and I am convinced that this is just party time for the bankers and a waste of money as nothing was resolved. There is a reason why nothing was resolved at this meeting and that is because the Fed headed by Janet Yellen has no clue about what to do with the U.S. economy. I have been harping on this for the past several years and believe the Fed is up the creek without a paddle and clueless about what to do. All this after printing trillions of dollars. Remember Helicopter Ben throwing money everywhere? That is Ben Bernanke the former head of the FED; his thesis was to do everything the opposite of the great depression when money was tight. Looks like it didn't work out too well for you Ben.
We live in a capitalistic economy, at least that is what they tell me and a capitalistic economy has boom and bust cycles. It is impossible for a capitalistic economy to stay even and smooth.
The only way I can see the Fed making its way out of this remarkable self-made disaster is by inflating the economy. That would take the onus off them and help stimulate businesses and production.
Is that likely to happen? At this point, your guess is as good as mine. As I stated earlier, the Fed is like a deer in the headlights and their actions are frozen in time. Plus, the FED is all out of options.
Let's begin today by looking at the major indices and where they are currently trading.
DOW (INDEX:DJI): All of the Trade Triangles remain green and the trend continues on the upside. You should be holding long positions unless the 18,335 is broken on the downside this week.
S&P 500 (CME:SP500): The S&P 500 Remains in a positive trend with higher target levels. Unless something dramatic happens this week, you should be holding long positions. An intermediate reversal would occur in a move below 2160.
NASDAQ (NASDAQ:COMP): The NASDAQ remains in the confines of a general uptrend as defined by the Trade Triangles. I would expect that this index will begin to see support and regain its upward momentum as early as this week. All bets are off on a move this week below 5,191.
Crude Oil (NYMEX:CL.V16.E): Oil is in a long position based on the Trade Triangles and you would add to them today while putting a stop at the $46.40 level.
Gold (FOREX:XAUUSDO): With the weekly and daily Trade Triangles red, the intermediate trend is down. I'm not comfortable pressing the short side of this market for two reasons. One, I believe the gold market is at or close to a low cyclic period. Two, major support at the July lows. I expect to see the gold market consolidate around current levels before resuming its upward trend.
Alert: please remember that markets can change quite dramatically especially in the last few days of August when the markets are thinly traded. Always have areas in your mind that if the market penetrates those levels, you will exit your position. This is called discipline and over the long term it will save you and make you money.
Stay focused and disciplined.
Every success with MarketClub,