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To: long-gone who wrote (60802)	11/10/2000 2:18:20 PM
From: Daveyk	Respond to of 116997

LOGIN Subscribe Daily Charts Historical Charts TA Course Glossary Chart Spotlite TAC Home Wave Signals Commentary By Mike Drakulich 11-9-00 POINT OF RECOGNITION IN U.S. ASSET BUBBLE? Are we finally reaching a point of recognition in the U.S. Financial Asset Bubble? I think there is a very good chance we are and it's a culmination of many things, and it's a process that has taken week and months, if not a few years, but that can have a rather rapid perception shift over a few weeks or months(like now?). We've seen the stock market, especially the Nasdaq which was really the main engine of the last several years, already having been in a Bear Market since the March all time high. We've seen spectacular intervening rallies that serve to get the masses Bullish again, and then they fizzle, that again appears to be happening right now. And we have seen earnings forecasts continue to get more negative, and we've seen a significant slowing in the recent economic numbers. Also, we have had a huge trade deficit that has been ignored by the vast majority as the capital inflows to the U.S. resulted in a very strong U.S. dollar, which has served to dwarf any "trade deficit" worries. Perceptions can and often do change surprisingly quickly, and I believe that the perception of the U.S being the Financial and Political "rock" of the world may be undergoing a dramatic change. This election mess we are seeing could be the straw that breaks the proverbial "camels back" in those perceptions. My Big picture Ewave and technical work strongly suggest that the dollar index(DXY) made very important top at the 119.07 level on Oct. 25th. And the ensuing decline to the low at 113.92 looks to be a clearly Bearish 5-wave structure. The implication is that we are currently seeing a corrective bounce, and then an even steeper decline in the dollar is likely to follow. Remember, we've see a reinforcing "double whammy" of the dollar and stock prices both increasing, leading to even more buying, basically a frenzy. In Bear Markets that situation is reversed, asset prices(stocks) fall and then foreign money starts to leave the U.S, exacerbating dollar selling and the whole process. It took years for this situation to build on the way up, and it could take quite a while on the way down as we "unwind" the years and years of excesses that we have seen. Besides the stock market weakness and recent signs of significant economic slowdown, I think this election quagmire we are seeing could be a very significant event. Not only has capital poured into the U.S because of the economic strength of recent years, the political stability and hence "safety" has always made the U.S. a safe haven for foreign capital. If, and I stress IF, this election and its unknown and perhaps likely negative effects lead to a significant change or reduction in that "perception", we could really begin to see the dollar fall and capital start to leave the U.S in very significant amounts. The results to this would be obvious, a continued deflating of the U.S stock market, a falling dollar, and very likely a large rally in the battered Euro and yes the UNBELIEVABLE, a significant rally in gold and silver, and gold stocks. No asset has been beaten down more or is universally more abhorred then gold and silver. In my work ALL the ingredients are coming together for gold a huge sea change here, and the risk/reward in owning gold and silver, as well as top tier gold stocks is as good as it gets in my opinion. Remember, any forecast is ones own analysis and interpretation, simply ones "best guess" that is his or her interpretation of what could happen. This is my best shot here.Whatever occurs, it promises to be very interesting and wild. ************************************************************************** ************************************************************************* ABOUT MIKE DRAKULICH FREE TRIAL OFFER** Mike is editor of the Wave Signals Newsletter, a daily publication that is emailed to clients. The major Financial markets are covered in the analysis. If you would like a FREE 2-week trial, simply Email Mike at: wave@pacifier.com