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Weekly Newsletter

U.S. Debt Clock http://www.usdebtclock.org/ tick....tick....tick......tick.....BOOM!

How much further in debt are U.S. Tax Payers?

RECAP FOR THE WEEK OF: AUG 16, 2010

I have mentioned the August 11-13 period as a reversal point in previous newsletters. Last week I stated: "If we move down into the 13th, we should see a rally for the next two weeks." We did move down to a short-term low last week, so the next two weeks should be higher. Monday could see the markets go even lower before we turn up.

Day of the Month Indicator is showing a move higher from Monday through Wednesday, then down for the rest of the week.

Of interest this last week was the use of the word "depression" by the talking heads on CNBC. Also, a segment on how the chart similarities between today's market and that of Great Depression is almost a carbon copy. Scary.

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Raymond Merriman sees trouble ahead:

Equities were not the only financial markets to make noteworthy moves last week. The most important development was in the U.S. Treasury markets, which blasted upwards following the Fed’s decision to resume purchase of these very long-term debt obligations of the U.S. Government. We said there could be a bubble, and if it happened in Treasures, it would result in “Double Bubble Trouble.” Indeed, that seems to be happening now as Treasuries approach the levels present in the height of the 2008 Panic. The Fed’s decision makes one wonder if things are progressing so badly that there is real danger of another economic and market collapse. Why would they take Treasuries back to the level of the 2008 crisis days if the economy was improving and stabilizing as the White House and its “Economic Dream Team” continues to insist? Somebody is not telling the whole story to the American people and the world. Don’t take my word for it. Take the word of the San Francisco Federal Reserve Bank report issued last week, stating that “… the probability that the U.S. economy will slip back into recession over the next two years is higher than that of economic expansion.” (CNBC.com, August 10).

Written by Raymond Merriman
Source: http://www.mmacycles.com/weekly-preview/mma-comments-for-the-week/mma-comments-for-the-week-beginning-august-16,-2010/

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Follow up of the Hindenburg Omen
http://www.zerohedge.com/article/couple-pointers-thestreetcom-blogging-etiquette

US Dollar breaks out of bullish channel and bullish wedge:

Follow-up -----------------------------------------------------------------------------------------------------

   "Monday could see the markets go even lower before we turn up." Monday was lower with a nice rally on Tuesday and Wednesday.

   "Day of the Month Indicator is showing a move higher from Monday through Wednesday, then down for the rest of the week." Yup, it did.

TRADING RESULTS

OEX SEP10 440 PUT -- We entered this trade on 8/19 @ $1.60, and watched it gain over 100%.

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FORECAST FOR THE WEEK OF: AUG 23, 2010

I am expecting a drop lower for the markets in the first part of the week.

Big move should be Wednesday or Thursday.

Using the low in July and the high in August, the 61.8% retracement levels are:
DJI -- 10,050
SPX -- 1058
OEX -- 480

Expect a short-time bounce off these levels, but remember the trend is down from now until Nov.

If you are looking to short some stocks. LNC, WFC, and BBY have made 52-week lows, and all 3 look like they are breaking to the downside of a Head-and-Shoulders.

Mercury went retrograde on Friday. Last time it went retrograde (4/11-5/11) we saw the Deepwater Horizon accident of 4/20 and the Flash Crash on 5/6. Should be interesting.

Time to take another look at the metals?
Big Autumn Silver Rally Ahead
Fear and Uncertainty Should Keep Gold Firm Next Week
Indian Demand for Gold during Festival Season Expected to Improve
Personally, I increased my holding in Silver last week. Hoping to see a good profit by the end of the year.

Any changing curcumstances will be noted in the Wall Street Forecaster Blog/

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