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The Technicals, Fundamentals, and Interventionals are all telling us to be prepared for Major Moves in several Key Markets. Consider the Indices, Gold, Crude Oil and long-term Interest Rates. TechnicalsThe Indices’ Technicals are in remarkable concord that a Fall is on the horizon. Consider a few: The NASDAQ Bullish Percent Index (BPCOMPQ) is showing the NASDAQ is at over-bought levels. The Dow - - at stratospheric levels - - is also in over-bought territory. And the Relative Strength Index and Williams Percent R indicators also show “over-bought.” And the Dow is well above its upper Bollinger band. Regarding Gold: the HUI (Gold Bugs Index) has been bouncing between the 350 and 370 levels, but is giving indications of breaking out of its trading range. Crude Oil has been range trading around the mid-60s for a few days now and there are also signs of a breakout. FundamentalsRegarding Fundamentals: as we have noted before, and as confirmed by shadowstats.com, Real Inflation is running at levels from 8 to 10% annually as opposed to the U.S. government-generated CPI and PPI numbers which display much lower massaged levels. The sub-prime mortgage crisis shows no signs of abating; foreclosures are increasing. In fact, the sub prime “disease” shows signs of spreading. Consumer and government debt levels are at all time highs and increasing. Iraq war and other government expenditures show no sign of abating. U.S. Government Budget Deficits and downstream unfunded liabilities continue to increase, with the latter estimated at some $45 trillion, give or take a couple of trillion. Yet the United States’ GDP has begun to decrease, according to shadowstats.com. All this adds up to Stagflation! Interventionals So far as the Interventionals go, they too appear to be marshalled to generate a Takedown in the Indices. Repo (Repurchase Agreement) Pool numbers appear to have begun a trend modestly down, likely a sign that support is being removed from the Dow. In our view, the “Interventionals” are The Trump Card - - and “Repos” are one vehicle apparently used by The Central Bank Cartel to manipulate markets. Thus the “Fall” in the Indices to which we refer should more appropriately be called a “Takedown.” For an overview of market manipulation in general see Deepcaster’s October, 2006 Letter entitled “Mega Manipulations - - Juiced Numbers IV: How the Government Gets the Statistics It ‘Wants,’ Markets Get Manipulated, Citizens Get Deluded and Worse” at www.deepcaster.com. Also see the excellent website of the Gold AntiTrust Action Committee (www.gata.org) for the substantial evidence it has marshalled regarding gold market manipulation. At www.deepcaster.com we indicate how we expect the Fall to manifest itself in the various markets in the next few weeks and we give specific recommendations for the following sectors by which investors could profit. Poised for ProfitCrude Oil is at a crucial point. The Interventional Indicators now point to a likely major move within the next two to three weeks rather than the sideways action around the mid-60s which we have been seeing. Deepcaster’s pick to profit from this anticipated move is posted at www.deepcaster.com. Gold & Silver: Deepcaster has also Forecast that a Major Move in Gold and Silver is likely, but not certain to occur in the next two to three weeks. We expect both bullion and mining shares to be affected. Deepcaster High Potential Speculators (DHPS) should be well positioned to take advantage of such a move with our DHPS Precious Metals recommendation. The key question regarding the impending move in Gold and Silver prices is not if, but when. As we have indicated before, the gold bullion and gold shares markets are so relatively small (compared to, e.g., crude oil and U.S. Treasury Securities) that they are relatively easy to manipulate. Thus The Cartel does not have to prepare (in any way obvious to investors) to make its move. On the other hand, demand for physically available Gold and Silver is increasing and aboveground supply is under increasing pressure. Thus “when” and “how much” (but not which direction) is the conundrum regarding the next Precious Metals Major Move. Interest Rates: Our previous forecast for long-term interest rates is proving correct. DHPS Speculators are well positioned for such a move with Deepcaster’s current recommendation. The Bottom LineThe bottom line is that we are at a climacteric in these Major Markets. The very near future will be most interesting.
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