The chart above is depicting the mother of all technical signals. If you can't interpret it, I'll just let you know that it is screaming to get all your money the hell out of the stock market ASAP!!! LOOK OUT BELOW!!! When used correctly, Fibonacci Analysis is one of the most accurate technical indicators a market observer can use to determine a markets direction.
If you have never studied the "Golden Ratio" or Fibonacci numbers and how they miraculously relate to the capital markets, I suggest you do some reading. http://www.amazon.com/Fibonacci-Analysis-Bloomberg-Professional-Constance/dp/1576602613/ref=sr_1_1?ie=UTF8&s=books&qid=1277433836&sr=8-1#noop (Yes, I own this book, and it has taught me some fascinating things.)
The fact that the DJIA completed an EXACT 61.8% retracement then proceeded to collapse is not a coincidence. When viewed from the perspective of fibonacci technical analysis and Elliot Wave Theory, the current 13% pullback from the April 26th highs is not surprising at all.
The renowned deflationist, Robert Prechter has essentially called every step of this crisis including the rebound rally that began in March of 2009. Personally, after reading his book "Conquer the Crash" I am 100% convinced that deflation (not inflation) lies directly ahead, and deflation on a massive scale. I am so sure of this, that I just sold all of my Gold today, as I believe gold will likely suffer a substantial pullback over the next year. I sold my gold at $1,243 per ounce (25 bucks off it's all-time high), I am hoping I will look back on today and smile, even though some people are saying Gold is headed to $10,000.
With the $8,000 homebuyer tax credit now expired, the housing market is going to suffer a double-dip that will shoot even bigger holes into banking balance sheets. You may be asking, is that even possible. Yes, it is, and you are about to witness the havoc it will release on all of Wall Street's self deluded optimism. I can't wait!
BTW: Can someone PLLEEEEAASSSE Punch Steve Liesman in the face for me. What a tool... now there is someone who should never be allowed to talk about the economy ever again.
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