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Very good read. Thanks for sending.
I would agree with this person. After seeing how
some of my small cap investments are getting
crushed to zero. (Now you know why I short stocks.
LOL <GGGGG>) I can see that other leg down.
Harley
Lpetersen1 wrote:
> All,
> Interesting weekend reading here. Please note
> the Prediction of the
> recent July 20th low since 1971, and the
> prediction of the second leg to
> this "correction" during the next several weeks.
>
>
> http://www.pei-intl.com/TOPICS/CRSH0814.HTM
>
> --------------------------------------------
> [Image]
> [Image]
>
> The Crash of ’98
>
> Continues
> By Martin A. Armstrong
> August 14, 1998
> Copyright Princeton Economic Institute
> -------------------------------------------------
>
> While our clients have been amazed
> that our computer model called for the
> peak in the stocks markets as July
> 20th, 1998 more than 4 years ago, some
> visitors to this site have sent their
> emails of disapproval. We have even
> received a nasty email suggesting that
> our forecast was perhaps
> self-fulfilling due to the fact that
> so many institutions rely on PEI
> models. Quite frankly, what we find
> more shocking is how the vast majority
> of analysts and commentators can still
> be bullish even with technical models
> aside. The more compelling
> fundamentals behind the decline in the
> world share markets is none other than
> the fact that world news is
> overwhelmingly disturbing. How anyone
> cannot see the seriousness of events
> building in Russia, China and Asia as
> a whole and their potential impact
> upon global economy is simply blind
> faith. We cannot expect the world to
> continue upward and onward just
> because we wish it to do so. There has
> NEVER been a bull market that was not
> followed by a correction. We do NOT
> see the end of the world - merely a
> correction that might be 2 years in
> duration if government gets its act
> together. The faster the decline in
> the early stages, the higher the
> probability that we will also see a
> final low sooner rather than later.
>
> With the closings achieved as of today
> (Friday, August 14, 1998), a sharp
> continued decline appears to be
> inevitable. If this weekend brings
> more chaos in Russia, next week may
> bring a significant continued decline
> throughout Europe; Asia and US share
> markets. From our perspective, there
> is no debate whether or not our
> computer has once again succeeded in
> predicting what many consider
> impossible. Nonetheless, the precise
> turning points of the Economic
> Confidence Model have been etched in
> stone since it was first discovered
> back in 1971. The dates do not change
> for July 20th or for the peak of the
> next business cycle due on February
> 24th, 2007. The more compelling
> question among those who have become
> students of this mode remains the next
> 4.3 years into the bottom of this
> current business cycle due on 2002.85
> (November 6th, 2002) following the US
> congressional elections at that time.
>
> In our upcoming World Capital Market
> Report due next week, we will discuss
> these issues with the target dates
> that lie ahead. We will also look at
> the fundamental differences between
> major bear markets and mere short-term
> corrections. As for our critics, this
> same model accurately predicted the
> 1987 Crash to the day and that new
> highs would be made going into 1989. I
> personally gave seminars for many
> brokerage houses around the world to
> relay that message in Europe, North
> America and Australia. So we do not
> have a history of calling for bear
> markets. In fact we have a track
> record of being very unbiased. But
> this very same model also succeeded in
> predicting the major high in the
> Nikkei back in 1989 for the last week
> of December, which has also been well
> documented by the Japanese press as
> well. It has also been well documented
> by the press and numerous
> organizations at which I have spoken
> over the past 4 years that this same
> model called for a low in the US and
> European share markets in 1994 and
> that the Dow would rally to test
> 10,000 by July 20th, 1998. In fact,
> many in London found that forecast
> quite amusing 3 years ago because we
> put a specific date of July 20th for
> the potential high. These issues said,
> this correction in the share markets
> may be very different from anything we
> have seen since 1987. There are some
> serious risks that exist, which could
> result in a real bear market.
>
> For now, new highs do not appear to be
> likely given the fact that the US
> market has now elected 3 Weekly
> Bearish Reversals for the first time
> in nearly 8 years. This indicator
> provided by our models has clearly
> differentiated the current decline
> from that of even just last October
> when no sell signals were achieved
> beyond the daily timing models. Thus,
> we must remain objective looking for a
> test of the Dow in the mid-6,000 range
> before a reversal of fortune can be
> expected.
>
> While there will be hate-mails from
> some, we all must realize that many
> analysts who are employed by brokerage
> houses do not enjoy the freedom of
> speech that others in the analytical
> community cherish. Those who do have
> the courage to change their views
> should not be ridiculed when they try
> to speak the truth even when the truth
> is not what everyone would like to
> hear. We cannot forget the analyst who
> was fired because he warned about
> Trump’s bonds before his troubles.
> While he was sacked by the brokerage
> house for speaking the truth, in the
> end he was proven to be correct.
>
> The majority never wants to hear about
> a bear market. Everyone wants to be
> told how much money they can make
> effortlessly forever. Nonetheless, it
> is always the bear market that
> eventually distinguishes independent
> analysis from that, which is viewed to
> be only a token cost of doing business
> as a means to sell a product.
>
> For now, we remain bullish on the US
> bond market at least going into 1999.
> The US economy will also suffer the
> least decline when the final low print
> has been established. The greatest
> danger remains that of Europe where
> optimism over the coming Euro has
> blinded many to the problems faced
> today by the world economy as a whole.
> We must be most concerned about Europe
> for it is this region that is showing
> the highest tendency to unfold into a
> bear market of significant
> proportions.
>
> As of the close of Friday, August 14,
> 1998, the percentage declines for
> those markets that peaked precisely on
> July 20th, 1998 stand as follows:
>
> US Dow Jones Industrials…. 11.21%
>
> S&P 500 Cash……………… 11.47%
>
> S&P 500 Futures…………… 11.78%
>
> British FT100 Futures……… 14.00%
>
> German DAX Cash………… 15.94%
>
> German DAX Futures……… 16.09%
>
> French CAC40 Futures…….. 14.12%
>
> Swiss Futures………………. 13.15%
>
> So far our forecast for a decline in
> Europe that would outpace that of the
> US market has begun. The above table
> illustrates that as of August 14th,
> the US market has declined the LEAST.
> Given the fact that the European
> markets have gained the most on the
> upside due to the view of the coming
> Euro, we will also see the greatest
> tendency for a bubble top to form
> within German and French markets in
> particular. A collapse in Russia will
> have a far greater impact upon Europe
> than the United States. It is European
> banks that hold 90% of the exposure to
> Europe compared to US banks.
>
> For now, we remain bearish as we look
> ahead to the weeks of August 17th and
> September 7th/14th as the next key
> targets for turning points ahead. The
> most concerning factor that we must
> consider is that there has been no
> significant rally whatsoever since the
> July 20th peak. This warns that
> despite the bullish outlooks that
> prevail, real selling is taking place
> and far less bottom picking has
> emerged. The phrase "buying
> opportunity" appears to be falling on
> closed ears. While at some point in
> time there will be a 7-10% recovery
> from an initial low, the risk of a
> second leg down still remains quite
> high by mid September.
>
> -------------------------------------------------
>
> Click here to send us an email message
> [Image]Homepage
> -------------------------------------------------
>
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Very good read. Thanks for sending.
<BR>I would agree with this person. After seeing how some of my small cap
investments are getting crushed to zero. (Now you know why I short stocks.
LOL <GGGGG>) I can see that other leg down.
<P>Harley
<P>Lpetersen1 wrote:
<BLOCKQUOTE TYPE=CITE>
<PRE WRAP>All,
Interesting weekend reading here. Please note the Prediction of the
recent July 20th low since 1971, and the prediction of the second leg to
this "correction" during the next several weeks.
http://www.pei-intl.com/TOPICS/CRSH0814.HTM</PRE>
<HR WIDTH="90%" SIZE=4>
<CENTER></CENTER>
<CENTER><IMG SRC="cid:part2.35F0B997.E25074A9@xxxxxxxxxxx"; ></CENTER>
<CENTER><IMG SRC="cid:part3.35F0B997.E25074A9@xxxxxxxxxxx"; ></CENTER>
<CENTER>
<H2>
The Crash of ’98</H2></CENTER>
<CENTER>Continues</CENTER>
<CENTER></CENTER>
<CENTER><I>By Martin A. Armstrong</I></CENTER>
<CENTER></CENTER>
<CENTER><I>August 14, 1998</I></CENTER>
<CENTER></CENTER>
<CENTER><I>Copyright Princeton Economic Institute</I></CENTER>
<HR>
<BLOCKQUOTE><B>While our clients have been amazed that our computer model
called for the peak in the stocks markets as July 20<SUP>th</SUP>, 1998
more than 4 years ago, some visitors to this site have sent their emails
of disapproval. We have even received a nasty email suggesting that our
forecast was perhaps self-fulfilling due to the fact that so many institutions
rely on PEI models. Quite frankly, what we find more shocking is how the
vast majority of analysts and commentators can still be bullish even with
technical models aside. The more compelling fundamentals behind the decline
in the world share markets is none other than the fact that world news
is overwhelmingly disturbing. How anyone cannot see the seriousness of
events building in Russia, China and Asia as a whole and their potential
impact upon global economy is simply blind faith. We cannot expect the
world to continue upward and onward just because we wish it to do so. There
has NEVER been a bull market that was not followed by a correction. We
do NOT see the end of the world - merely a correction that might be 2 years
in duration if government gets its act together. The faster the decline
in the early stages, the higher the probability that we will also see a
final low sooner rather than later.</B>
<P><B>With the closings achieved as of today (Friday, August 14, 1998),
a sharp continued decline appears to be inevitable. If this weekend brings
more chaos in Russia, next week may bring a significant continued decline
throughout Europe; Asia and US share markets. From our perspective, there
is no debate whether or not our computer has once again succeeded in predicting
what many consider impossible. Nonetheless, the precise turning points
of the Economic Confidence Model have been etched in stone since it was
first discovered back in 1971. The dates do not change for July 20<SUP>th</SUP>
or for the peak of the next business cycle due on February 24<SUP>th</SUP>,
2007. The more compelling question among those who have become students
of this mode remains the next 4.3 years into the bottom of this current
business cycle due on 2002.85 (November 6<SUP>th</SUP>, 2002) following
the US congressional elections at that time.</B>
<P><B>In our upcoming World Capital Market Report due next week, we will
discuss these issues with the target dates that lie ahead. We will also
look at the fundamental differences between major bear markets and mere
short-term corrections. As for our critics, this same model accurately
predicted the 1987 Crash to the day and that new highs would be made going
into 1989. I personally gave seminars for many brokerage houses around
the world to relay that message in Europe, North America and Australia.
So we do not have a history of calling for bear markets. In fact we have
a track record of being very unbiased. But this very same model also succeeded
in predicting the major high in the Nikkei back in 1989 for the last week
of December, which has also been well documented by the Japanese press
as well. It has also been well documented by the press and numerous organizations
at which I have spoken over the past 4 years that this same model called
for a low in the US and European share markets in 1994 and that the Dow
would rally to test 10,000 by July 20th, 1998. In fact, many in London
found that forecast quite amusing 3 years ago because we put a specific
date of July 20th for the potential high. These issues said, this correction
in the share markets may be very different from anything we have seen since
1987. There are some serious risks that exist, which could result in a
real bear market.</B>
<P><B>For now, new highs do not appear to be likely given the fact that
the US market has now elected 3 Weekly Bearish Reversals for the first
time in nearly 8 years. This indicator provided by our models has clearly
differentiated the current decline from that of even just last October
when no sell signals were achieved beyond the daily timing models. Thus,
we must remain objective looking for a test of the Dow in the mid-6,000
range before a reversal of fortune can be expected.</B>
<P><B>While there will be hate-mails from some, we all must realize that
many analysts who are employed by brokerage houses do not enjoy the freedom
of speech that others in the analytical community cherish. Those who do
have the courage to change their views should not be ridiculed when they
try to speak the truth even when the truth is not what everyone would like
to hear. We cannot forget the analyst who was fired because he warned about
Trump’s bonds before his troubles. While he was sacked by the brokerage
house for speaking the truth, in the end he was proven to be correct.</B>
<P><B>The majority never wants to hear about a bear market. Everyone wants
to be told how much money they can make effortlessly forever. Nonetheless,
it is always the bear market that eventually distinguishes independent
analysis from that, which is viewed to be only a token cost of doing business
as a means to sell a product.</B>
<P><B>For now, we remain bullish on the US bond market at least going into
1999. The US economy will also suffer the least decline when the final
low print has been established. The greatest danger remains that of Europe
where optimism over the coming Euro has blinded many to the problems faced
today by the world economy as a whole. We must be most concerned about
Europe for it is this region that is showing the highest tendency to unfold
into a bear market of significant proportions.</B>
<P><B>As of the close of Friday, August 14, 1998, the percentage declines
for those markets that peaked precisely on July 20<SUP>th</SUP>, 1998 stand
as follows:</B>
<P><B>US Dow Jones Industrials…. 11.21%</B>
<P><B>S&P 500 Cash……………… 11.47%</B>
<P><B>S&P 500 Futures…………… 11.78%</B>
<P><B>British FT100 Futures……… 14.00%</B>
<P><B>German DAX Cash………… 15.94%</B>
<P><B>German DAX Futures……… 16.09%</B>
<P><B>French CAC40 Futures…….. 14.12%</B>
<P><B>Swiss Futures………………. 13.15%</B>
<P><B>So far our forecast for a decline in Europe that would outpace that
of the US market has begun. The above table illustrates that as of August
14<SUP>th</SUP>, the US market has declined the LEAST. Given the fact that
the European markets have gained the most on the upside due to the view
of the coming Euro, we will also see the greatest tendency for a bubble
top to form within German and French markets in particular. A collapse
in Russia will have a far greater impact upon Europe than the United States.
It is European banks that hold 90% of the exposure to Europe compared to
US banks.</B>
<P><B>For now, we remain bearish as we look ahead to the weeks of August
17<SUP>th</SUP> and September 7<SUP>th</SUP>/14<SUP>th </SUP>as the next
key targets for turning points ahead. The most concerning factor that we
must consider is that there has been no significant rally whatsoever since
the July 20<SUP>th</SUP> peak. This warns that despite the bullish outlooks
that prevail, real selling is taking place and far less bottom picking
has emerged. The phrase "buying opportunity" appears to be falling on closed
ears. While at some point in time there will be a 7-10% recovery from an
initial low, the risk of a second leg down still remains quite high by
mid September.</B></BLOCKQUOTE>
<HR>
<H5>
</H5>
<CENTER><A HREF="mailto:webmaster@xxxxxxxxxxxx";>Click here to send us an
email message</A></CENTER>
<CENTER></CENTER>
<CENTER>Homepage</B></CENTER>
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