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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (8439)	2/22/2004 2:30:56 PM
From: mishedlo	Read Replies (2) \| Respond to of 110194

There is nothing "isolated' about this inflation outbreak whatsoever. I strongly disagree Inflation is primarily isolated to commodities: copper, steel, oil, natural gas, soybeans. Wages are headed down Jobs have not picked up Money supply is headed down In theory prices on finished goods should be headed up, in practice there has been little evidence of it. Every day you show commodities headed higher. Where are they headed now? I do not know just asking. Look at the US$ for answers. Is it headed up down or sideways from here? If the US$ reverses for whatever reason metals will reverse. Look at Friday for a glimpse. What happened to the US$ and metals, across the board on Friday: gold, silver, copper, platinum, paladium? Perhaps we just had a blowoff top in copper. Take a look at HG H4. I predict a fall in copper to the 50 MA. Parabolic rises are not sustainable. Not sure a timeframe but it will happen fall to 112 area I would guess. Perhaps when these strikes get resolved. Perhaps China alowing on its own accord. The blowoff top you have been calling for just might be right here right now, and if so it will not take a rate hike to bring it back inline. I provided eveidence of a buildup in inventories. (was that here or on my board?) I believe that is very real. It will slow production as well as commodities demand if that view is correct. US auto sales are sucking big time. That should over time lessen steel prices. China has given evidence of wanting restraint. It takes time for that to work itself into the system. FWIW, I expect a decline in the next PPI if oil prices stabilize and a big decline if they drop. Oil has geoploitical facors as opposed to just a demand issue so it is hard to say what happens to oil. Perhaps we have a blowoff top there in filling US reserves. If a pipeline busts in Saudi Arabia oil prices are headed to the moon and will have a huge DAMPENING affect on the economy in and of itself. Next up: Rate cut in Canada Mish

To: russwinter who wrote (8439)	2/22/2004 6:36:38 PM
From: Jim Willie CB	Respond to of 110194

potential for JYen collapse ? very substantial breakdown in the JYen last week the chart looks like it will challenge that glaring gap from October now at 92, the gap presents itself as 85-87 I think we get to 90 quickly, then stare at the gap when I made my JYen call this past summer, I said "target of 94 nearterm, then target of 100 parity longterm" we hit the 94 target just fine, even got to 95 not so sure about the path to parity now CB intervention has changed the dynamics tremendously gold-eagle.com the author made a solid case for chart similarities between the JYen/$ rate and the USTBond principal value if the JYen comes down significantly, we may see rising US interest rates, given the link between the two continues in other words, the BOJ might sell their intervention holdings conclusion: Because of the various factors outlined above, we are watching market behavior for signs of an imbalance that could mark the start of a sustained breakdown in futures prices. Trading activity in the week ended February 20, 2004 featured a stochastic downturn that confirmed a bearish price/momentum divergence on the daily yen futures chart, a weekly stochastic downturn that confirmed a bearish price/momentum divergence on that chart, weekly downside range expansion that violated a 3 month support line, and enough range expansion on the monthly chart to establish an "outside" range that has top reversal potential depending on where the February 27 close is situated. Also dependent on that level is a potential monthly stochastic downturn. All of these factors suggest to us that the Japanese yen will face weakness, possibly a collapse, relative to the U.S. dollar as we move further out into 2004. / jim