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From: Rarebird	4/12/2010 9:04:58 AM
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Transcendental Market Truths: Dow Industrials: The Dow has been exhibiting strength on my top-down money flow gauge as the smart money (government and banks, mostly) uses futures and options to dangle the carrot of higher prices to entice sidelined investors to buy blue chip stocks. However, under the surface, when I analyze the individual trading in the component stocks in the average, I find that there has been liquidation of positions rather than a buildup of shares. This confirms that the entire bear market rally since last March has simply been an operation of the government to foster confidence and stimulate investors to forget that the financial system as a whole is bankrupt. Apparently, the government believes so much in the "Wealth Effect" of higher stock prices that it is willing to spend with complete abandon in the stock market in order to brighten the spirit of citizens. This reminds me of the kind of things the Romans used to do to brighten the spirit of citizens as the Empire declined and crumbled. It's designed to fool the average citizen long enough for the nobles to steal as much wealth as they can before the walls of the city-state come tumbling down. In short: this mania will end very badly. May 20 and August 26 are the decisive dates for a double top before the killer wave 3 down ensues. Dollar Index: The Dollar Index is on its way to 120 in 2014. All dips are buying opportunities for long term holders, irrespective of trading short term moves that are all countertrend affairs. EUR/USD: The long term decline has barely begun in the Euro as it follows the path of least resistance down. Gold: Gold continues to follow last weeks forecast and is moving higher into late August. Mining Stocks: Investors think gold and silver miners will outperform the rest of the stock market in coming months. If they're so bullish, why aren't they buying the shares? It's because they already bought and there is no substantial influx of new cash coming into the group. The only reason these stocks are moving higher is the price of Gold is moving higher as I forecast it would last week. I'd stay away from this sector. Russell 2000: The Russell 2000 should be making a long term top within the next month, possibly this week. SemiConductor Index: Semiconductor stocks are some of the most-loved stocks the trading public wants to own. But, money flow indicates this will be one of the first sectors to top and fall.

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