Technical Analysis for 6/8/2010

It is my belief that our Economy runs on 40 year cycles. These are feast/famine cycles that are mostly associated with birth rates. The largest population to watch is the Baby Boomer population. Their actions should have drastic effects on our economy as they go into retirement. Ignoring their actions could lead to drastic investment short falls.



With this in mind, I have spent a lot of time looking for the generational stock market crash of epic proportion. Aka the lock limit down day where trading is actually halted. Our current financial situation is very much similar to The Great Depression. Most people fail to realize that the stock market halved itself 3 times from 1929 to mid 1932. The largest difference between our recent Bear rally is that the Bear rally in 1930 only lasted 6 months. Currently the Bear market rally is around ~14 months, or longer if we are not done. Keep in mind, in 1930 there was hope that the economy was recovering. Politicians and business men alike praised that all was well. The true problems really started surfacing in October 1930. While there are currently signs that things are "ok," our insolvent banks show that they are very much not ok.



I still have four longer term counts that are still applicable. My preferences are the two more bearish scenarios. I am 100% short from 20 minutes before the market close on 5/28/2010.










We are in very critical waters while we remain under the 200 day moving average as per this chart:



And finally, and most importantly, is the 800 pound gorilla in the room. Aka the US Dollar. A stronger dollar means a flight out of Stocks and Commodities. My target on the EUR/USD is down $0.03 by morning, which could equal nastiness for tomorrows open.