|
Grizzly's
Growlings Back Issues
Monday
Morning Market Musings 11/02/98
NFL $600
million, IMF 0
Needless to say, the long-awaited October crash was nowhere to be found. Quite the opposite, in fact - the DJIA gained nearly 10% for the month, yielding its best monthly gain since January, 1987. (You remember 1987, right?)
What happened, or more importantly, what didn’t happen in October? What didn’t happen was the much-awaited Elliott Wave Primary Wave 3, which has been just over the precipice for an eternity now.
Despite, or more precisely because of, the 1200 point rally since October 8th, the case for an imminent and massive crash really hasn’t changed. The precise timing of such an earthquake has always been the question.
All is still according to plan, as described in Frost & Prechter’s Elliott Wave Principle, page 68:
"Second waves often retrace so much of wave one that most of the profits gained up to that time are eroded away by the time it ends."
That’s an understatement, guys! This ongoing bear market rally has been excruciatingly painful. It is accomplishing its goal of shaking the confidence of weak bears and re-encouraging the bulls.
As we surmised back in our September 28th "Too Many Bears?" analysis, things were starting to smell fishy for an October crash. The editions Fortune, Forbes, Time, and Esquire magazines on newsstand at that time all sported catchy covers describing the upcoming crash.
"In anticipation of the month of historic crashes, the bears have come out of the woods and the woodwork. All of the above magazines provide excellent arguments for our Great Bear Market. But, that’s the problem. Are there just may be too many bears?"
The answer for October was yes. The answer for November is maybe, with the risk of an historic crash remaining high.
US stocks remain on FULL CRASH ALERT!
Many have analogized this bear market rally to John Glenn’s triumphant return to outer space. As Steven Hochberg, editor of Elliott Wave International’s Short Term Update, commented last Friday:
"Glenn [first] went up on February 20, 1962, right in the middle of a vicious bear market rally. The Dow peaked a little over three weeks later (near its November 1961 peak), then fell 25% into the ultimate low in June 1992. Is today’s space shot significant? It sure looks interesting."
Asian markets are mostly higher going into Monday morning trading on Wall Street. At press time at 1:00am EST, the Nikkei 225 is up 2%, closing in on 14,000 yet again. S&P 500 futures trading on Globex are off fractionally from Friday’s close.
In the latest report from the sanatorium (or is it the sanitarium), Boris Yeltsin’s "cold" has progressed to "nervous exhaustion and uneven blood pressure." In actuality, Yeltsin has been out of commission for weeks now. Those pulling his strings are also rigging the Russian constitution to obviate the need to hold elections should Yeltsin expire before the end of the century. The outlook for the Russian economy is no better than Yeltsin’s chances of making it to Y2K.
US farmers are salivating at the prospect of massive food-aid to Russia, and China as well. Their motives may be less humanitarian than economic, hoping that such aid will absorb much of this year’s bumper crops and help prop up prices. Not likely.
The deepening global deflation is much bigger than the Russian and Chinese crises. "For the first time in decades, there is widespread price deflation going on in much of the world," pronounced Allen Sinai, chief global economist at Primark Decision Economics. A few million tons of grain will just be a few grains of sand on the beach to the incoming tsunami.
The National Football League is not easily confused with the International Monetary Fund, although the NFL has more money and more clout than the IMF. John Elway and John Madden are not easily confused with Alan Greenspan and Michel Camdessus, yet the two Johns and the rest of the NFL may soon be the toast of Wall Street.
Backed by its $18 billion in national television contracts, the NFL is the first professional sports league to bellying up to the bond trough, where they scored $600 million in 10-year bonds.
Maybe the IMF can get the NFL to do a world-wide expansion and issue franchises to every country in need of economic stimulation and fiscal restraint. It would sure be more effective than any IMF bailout plan.
Let’s see, the football Bears of Chicago are in the NFL. The basketball Bulls of Chicago are in the NBA. The NFL is rolling in the dough and taking it to the Street. The NBA is off the court and off the radar screen, having already cancelled several weeks of this year’s season due to a deadlock between the greedy owners and the even greedier player’s association. Which way are the sports markets pointing?
The Conference Board reported last Tuesday that US consumer confidence has slipped to it lowest level in two years, down from June’s record high. Yet the consensus opinion of government and private economists is that the world financial crisis has eased and the US economy will be spared.
"The world’s leading economies have linked arms to contain the financial turmoil," proclaimed President Clinton, referring to last week’s latest and greatest IMF crisis prevention package. He speaks, therefore he presides. The problem is solved.
In times like these, a little levity is in order to help relieve our disappointment over the delay in the onset of the next leg of the Great Bear Market. Here’s a lighthearted look at the latest market action, courtesy of Mark Guthner and others.
Helium was up; feathers were down.
Paper was stationary.
Fluorescent tubing was dimmed in light trading.
Knives were up sharply.
Cows steered into a bull market.
Pencils lost a few points
Hiking equipment was trailing.
Elevators rose, while escalators continued their slow decline.
Weights fell in heavy trading.
Light switches were off.
Mining equipment hit rock bottom.
Diapers remain unchanged.
Shipping lines stayed at an even keel.
The market for raisins dried up.
Coca Cola fizzled.
Caterpillar Stock inched up a bit.
Sun peaked at midday.
Balloon prices were inflated.
Scott Tissue touched a new bottom.
And batteries exploded in an attempt to recharge the market.
Grizzly
Please read the disclaimer.