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George Slezak's   www. Stock Index Timing .com   Index Page 
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MARKET VIEWS .TV INTERVIEW CHART PAGE

The following charts are for reference to the interview of George Slezak by Ike Iossif of Market Views .TV on August 23, 2008. 

 LISTEN

BOTTOM LINE ON STOCKS: In my web site Stock Index Timing .com, I am currently on a "SELL SIGNAL" on the stock market. On August 11, Dow 11781 and S&P 1305, I returned to a  "SELL signal" on the stock market.  I am now looking for the stock market to accelerate in a "third of the third" leg decline through the end of the year.

BOTTOM LINE ON COMMODITIES: In my web site Commodity Index Timing .com, I am currently on a "SELL SIGNAL" on the commodity indexes. On July 11, the day of the $146.65 peak in crude, I returned to a "SELL signal" on the commodity indexes. I am now looking for a crash in the commodity markets through the end of the year.

STOCK MARKET COMMENTARY from www.StockIndexTiming.com (shortcut www.sit1.com ):

THE JULY LOW 
WAS NOT THE BOTTOM

The question is "was the July 15, 2008, low in the stock market the bottom of the bear market since the October 11, 2007 high?"

The following chart shows the Dow Industrials since the 2002 bottom. The 24.8% decline since the October high qualifies in percentage terms, as a bear market. The nine month term of the decline also meets a completed bear market standard. The issue is "is it over?"

CHART 1

The following is a chart of the Dow Transports since the 2002 bottom. The ALL TIME HIGH in the Dow Transports was May 19, 2008. Doesn't look like the bear market has even begun in this index!

CHART 2

The following is a chart of the Dow Utilities since the 2002 bottom. The ALL TIME HIGH in the Dow Utilities was January 8, 2008. Based on this chart, it just doesn't look like the bear market has run it's course.

CHART 3

Each week in my Stock Index Timing .com commentary I post a screen shot video run through my file of 42 past market tops since 1886 and 41 past market bottoms since 1886. There are many comparisons to past major market declines that could support that this bear market has finished. Many of those would suggest we need a retest. There are a lesser number of comparisons to past declines that suggest the bear market could extend for another six months to a year.

The following chart is a comparison of our current Dow to the bear market following the 1899 top. This is an example of a bear market comparison that could suggest a bull market ahead, after a retest.

CHART 4

The following chart is a comparison of our current Dow to the bear market following the 1968 top. This is an example of a bear market comparison that could suggest another extended leg of decline that might continue through most of 2009.

CHART 5

My view is the Dow Industrials is over weighted in the financials and the decline in the index since October is not representative of the broad market. I think the Fed has overextended itself in putting bandages on the financial system and is un prepared to deal with a broad recession. 

I see us falling into recession and expect the stock market index to extend in another down leg to reflect the more serious broad market decline discounting a recession that has no end in sight.

COMMODITY MARKET COMMENTARY from www.CommodityIndexTiming.com (shortcut www.cit1.com ):

BUBBLES BURST

Following is a 10 year chart of the current Continuous Commodity Index showing the greatest commodity bubble in history. The question is "will the greatest commodity bubble in history be followed by the greatest commodity bust in history?"

I think it will.

CHART 6

In my interview with Market Views .TV in June, I showed a comparison of the current commodity bubble to the great bubbles in history; the 1929 stock market bubble, the 1980 gold market bubble and the 1990 Japanese stock market bubble. Following is an updated comparison.

The question I ask in looking at the following comparisons is "will the bust hold 2/3rds back, or fully retrace?" Will Gold hold $500, or go all the way back to $250? Will Oil hold $50, or go all the way back to $20? 

I think it all depends on the severity of the world wide recession.

CHART 7

How soon will the commodity decline accelerate? In this week's free Commitments of Traders .com commentary (shortcut www.cot1.com) I sent the following DAILY chart comparing the current top in corn to the top in corn in 2004. This pattern suggests an immediate acceleration in corn to the down side. I expect oil and gold will follow the same acceleration.

CHART 8

INTEREST RATES

In the following chart I am comparing the current NASDAQ (in magenta) to the pattern of the Dow Industrials in the 1930's and the Japanese Nikkie pattern of the 1990s. This, along with expecting a burst in the commodity bubble, is where I get my view that we are moving into a serious time of deflation like the late 1930's in the US or like the recent experience in Japan, and the impact on interest rates will be dramatic. 

I think both long and short term interest rates are low going lower, for a long time.

CHART 9

Good luck and good trading!

George

George Slezak publishes the web sites www.commitmentsoftraders.com (shortcut www.cot1.com ) and www.stockindextiming.com (shortcut www.sit1.com )and www.commodityindextiming.com  (shortcut www.cit1.com ) for a combined monthly subscription of $35 per month.

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