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Janet Yellen first congressional testimony
Chair Janet L. Yellen
Semiannual Monetary Policy Report to the Congress
Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
February 11, 2014
http://www.federalreserve.gov/newsevents/testimony/yellen20140211a.htm
http://www.federalreserve.gov/newsevents/testimony/yellen20140211a.pdf
Chairman Hensarling, Ranking Member Waters and other members of the Committee, I am pleased to present the Federal Reserve's semiannual Monetary Policy Report to the Congress. In my remarks today, I will discuss the current economic situation and outlook before turning to monetary policy. I will conclude with an update on our continuing work on regulatory reform.
First, let me acknowledge the important contributions of Chairman Bernanke. His leadership helped make our economy and financial system stronger and ensured that the Federal Reserve is transparent and accountable. I pledge to continue that work.
Current Economic Situation and Outlook
The economic recovery gained greater traction in the second half of last year. Real gross domestic product (GDP) is currently estimated to have risen at an average annual rate of more than 3-1/2 percent in the third and fourth quarters, up from a 1-3/4 percent pace in the first half. The pickup in economic activity has fueled further progress in the labor market. About 1-1/4 million jobs have been added to payrolls since the previous Monetary Policy Report last July, and 3-1/4 million have been added since August 2012, the month before the Federal Reserve began a new round of asset purchases to add momentum to the recovery. The unemployment rate has fallen nearly a percentage point since the middle of last year and 1-1/2 percentage points since the beginning of the current asset purchase program. Nevertheless, the recovery in the labor market is far from complete. The unemployment rate is still well above levels that Federal Open Market Committee (FOMC) participants estimate is consistent with maximum sustainable employment. Those out of a job for more than six months continue to make up an unusually large fraction of the unemployed, and the number of people who are working part time but would prefer a full-time job remains very high. These observations underscore the importance of considering more than the unemployment rate when evaluating the condition of the U.S. labor market.
Among the major components of GDP, household and business spending growth stepped up during the second half of last year. Early in 2013, growth in consumer spending was restrained by changes in fiscal policy. As this restraint abated during the second half of the year, household spending accelerated, supported by job gains and by rising home values and equity prices. Similarly, growth in business investment started off slowly last year but then picked up during the second half, reflecting improving sales prospects, greater confidence, and still-favorable financing conditions. In contrast, the recovery in the housing sector slowed in the wake of last year's increase in mortgage rates.
Inflation remained low as the economy picked up strength, with both the headline and core personal consumption expenditures, or PCE, price indexes rising only about 1 percent last year, well below the FOMC's 2 percent objective for inflation over the longer run. Some of the recent softness reflects factors that seem likely to prove transitory, including falling prices for crude oil and declines in non-oil import prices.
My colleagues on the FOMC and I anticipate that economic activity and employment will expand at a moderate pace this year and next, the unemployment rate will continue to decline toward its longer-run sustainable level, and inflation will move back toward 2 percent over coming years. We have been watching closely the recent volatility in global financial markets. Our sense is that at this stage these developments do not pose a substantial risk to the U.S. economic outlook. We will, of course, continue to monitor the situation.
Monetary Policy
Turning to monetary policy, let me emphasize that I expect a great deal of continuity in the FOMC's approach to monetary policy. I served on the Committee as we formulated our current policy strategy and I strongly support that strategy, which is designed to fulfill the Federal Reserve's statutory mandate of maximum employment and price stability.
Prior to the financial crisis, the FOMC carried out monetary policy by adjusting its target for the federal funds rate. With that rate near zero since late 2008, we have relied on two less-traditional tools--asset purchases and forward guidance--to help the economy move toward maximum employment and price stability. Both tools put downward pressure on longer-term interest rates and support asset prices. In turn, these more accommodative financial conditions support consumer spending, business investment, and housing construction, adding impetus to the recovery.
Our current program of asset purchases began in September 2012 amid signs that the recovery was weakening and progress in the labor market had slowed. The Committee said that it would continue the program until there was a substantial improvement in the outlook for the labor market in a context of price stability. In mid-2013, the Committee indicated that if progress toward its objectives continued as expected, a moderation in the monthly pace of purchases would likely become appropriate later in the year. In December, the Committee judged that the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions warranted a modest reduction in the pace of purchases, from $45 billion to $40 billion per month of longer-term Treasury securities and from $40 billion to $35 billion per month of agency mortgage-backed securities. At its January meeting, the Committee decided to make additional reductions of the same magnitude. If incoming information broadly supports the Committee's expectation of ongoing improvement in labor market conditions and inflation moving back toward its longer-run objective, the Committee will likely reduce the pace of asset purchases in further measured steps at future meetings. That said, purchases are not on a preset course, and the Committee's decisions about their pace will remain contingent on its outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases.
The Committee has emphasized that a highly accommodative policy will remain appropriate for a considerable time after asset purchases end. In addition, the Committee has said since December 2012 that it expects the current low target range for the federal funds rate to be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation is projected to be no more than a half percentage point above our 2 percent longer-run goal, and longer-term inflation expectations remain well anchored. Crossing one of these thresholds will not automatically prompt an increase in the federal funds rate, but will instead indicate only that it had become appropriate for the Committee to consider whether the broader economic outlook would justify such an increase. In December of last year and again this January, the Committee said that its current expectation--based on its assessment of a broad range of measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments--is that it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the 2 percent goal. I am committed to achieving both parts of our dual mandate: helping the economy return to full employment and returning inflation to 2 percent while ensuring that it does not run persistently above or below that level.
Strengthening the Financial System
I will finish with an update on progress on regulatory reforms and supervisory actions to strengthen the financial system. In October, the Federal Reserve Board proposed a rule to strengthen the liquidity positions of large and internationally active financial institutions.1 Together with other federal agencies, the Board also issued a final rule implementing the Volcker rule, which prohibits banking firms from engaging in short-term proprietary trading of certain financial instruments.2 On the supervisory front, the next round of annual capital stress tests of the largest 30 bank holding companies is under way, and we expect to report results in March.
Regulatory and supervisory actions, including those that are leading to substantial increases in capital and liquidity in the banking sector, are making our financial system more resilient. Still, important tasks lie ahead. In the near term, we expect to finalize the rules implementing enhanced prudential standards mandated by section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. We also are working to finalize the proposed rule strengthening the leverage ratio standards for U.S.-based, systemically important global banks. We expect to issue proposals for a risk-based capital surcharge for those banks as well as for a long-term debt requirement to help ensure that these organizations can be resolved. In addition, we are working to advance proposals on margins for noncleared derivatives, consistent with a new global framework, and are evaluating possible measures to address financial stability risks associated with short-term wholesale funding. We will continue to monitor for emerging risks, including watching carefully to see if the regulatory reforms work as intended.
Since the financial crisis and the depths of the recession, substantial progress has been made in restoring the economy to health and in strengthening the financial system. Still, there is more to do. Too many Americans remain unemployed, inflation remains below our longer-run objective, and the work of making the financial system more robust has not yet been completed. I look forward to working with my colleagues and many others to carry out the important mission you have given the Federal Reserve.
Thank you. I would be pleased to take your questions.
Chemical & Mining of Chile (SQM) - NYSE . . .
Chemical & Mining Co. of Chile Inc. (SQM) - NYSE
is in the basing process, accumulate at ‘proper’ level for a long term core component. not for a 'hit & run' quick trade.
Annual Dividend Yield 4.03% (2013)
Do your own DD
Sociedad Quimica y Minera de Chile SA (SQM) is a Chile-based company engaged in the production of specialty plant nutrients and chemicals commodities. The Company’s activities are structured in six business units. In particular, it engages in the extraction and production of iodine derivates. Lithium, chemical element principally used in the production of rechargeable batteries
Investing in Lithium
Lithium Stocks (major: FMC ROC SQM )
http://www.buyupside.com/sample_portfolios/lithium.php
Increasingly Important Lithium Production May Bring Future Profits To These Companies
Sep 27 2013, 08:17
http://seekingalpha.com/article/1716852-increasingly-important-lithium-production-may-bring-future-profits-to-these-companies?source=yahoo
Chemical & Mining Co. Of Chile To Rise On Lithium Growth And Undervaluation
Nov 20 2013, 16:05
http://seekingalpha.com/article/1852941-chemical-and-mining-co-of-chile-to-rise-on-lithium-growth-and-undervaluation
Unlike Commodity Potash, SOP Is Not Awash With Mining Capacity
Nov 8 2013, 11:10
http://seekingalpha.com/article/1822572-unlike-commodity-potash-sop-is-not-awash-with-mining-capacity?source=yahoo
The Chemical And Mining Co. Of Chile Is A DOG! I Think We'll Adopt It...
Oct 25 2013, 07:08
http://seekingalpha.com/article/1773122-the-chemical-and-mining-co-of-chile-is-a-dog-i-think-well-adopt-it?source=yahoo
02/09/14 . . . . . . .
S&P500 is seemingly moving in wave b and is 'flirting' with the 50EMA. Resistance can be found near a few notable Fibonacci points, i.e, 1800.02 (0.236 frame 2), 1807.70 (0.618 local), 50SMA, 1811.98 (0.4464 , Frame 1), .... and 1826.26 (0.786 local, critical).
In short to middle term, the open debate remains whether the ongoing 'correction' is wave 4 that will lead to a new high wave 5 eventually; Cyclists have their dates in wide discrepancy.
wave hierarchical nomenclature
China Mobile Limited (CHL) – NYSE . . .
in a short term tradable position with moderate risk, place STOP
accumulate at ‘proper’ levels for a long term core component
Do Your own DD
Market Cap $191.04 billions
pay dividends semiannually, $1.15 & $1.09 in 2013, 4.71%
The Company and its subsidiaries provide mobile telecommunications and related services in 31 provinces, autonomous regions and directly-administered municipalities in Mainland China and Hong Kong. As of December 31, 2012, its total customer reached 710 million.
home page:
http://www.chinamobileltd.com/en/global/home.php
financial report 2013:
http://www.chinamobileltd.com/en/ir/reports/ir2013.pdf
02/08/2014 . . . . . . . .
This post together with prior posts present a simple way to obtain a rough pictorial picture. it is not intend to nail precise pivots. IMHO. Projection is only a small step for gaining profit from the market and usually it is the lesser important one.
Jesse Livermore quote : speculators never argue with the tape. Markets are never wrong, but opinions often are.
I proposed the following long term chart on September 30, 2012 (chart 1) . At that time I believed 1481.56 was an important inflection point , the peak could be 1829.17 (see chart & wave table), and then a sizable retracement will take place.
The purple and green rectangular box (in the lower right side of the chart 1, not to the scale) are the possible scenarios after the peaking process.
In chart 3, the blue, red, and orange colored segments represent the most obvious wave relationship among the S&P, NDX, DJI, and RUT. Those gobbledygook E-waver count had been ignored internationally because the existing structure is very simple & straightforward.
chart 1
chart 1 time stamp link:
http://forexrainbow.com/viewer.php?file=96164382991989141043.jpg
chart 2 The significance of 1481.56
chart 3 Wave set
wave table:
Index plotted an intraday high 1850.84 on Jan 15. From the wave table, pick the two green color numbers 1847.47 and 1854.12, the mean is 1850.80. In the same table, You also can find some “popular” numbers such as 1880, 1860, 1944, 2213 .. etc, These are just the wave Fibonacci extensions, not that cryptic.
The 'worst' case can be found in the Retracement table, frame 7, 0.618 @1117.81 (highlighted in purple color) which is closely matched with what Tom Demark projected.
Retracement table http://forexrainbow.com/images/28250003805511906708.jpg
TOM DEMARK: What we're seeing right now, if the market does unravel, I think we'll have a correction of 40% off the high, which would put us at about 1100 (on the S&P 500 index)
Read more: http://www.businessinsider.com/tom-demark-fears-market-crash-2014-2#ixzz2sbcPcKpx
IMHO, the Long term weekly chart (chart 4) hints a possible recurring rhythm. In overall, it is still very bullish.
As long as bull can hold the critical support zone 1450-1620 +/- . the bull market (since 2009) is firmly intact.
wave set 1 (666.79->1370,1074.77)
0.764 1612.47
0.786 1627.95
1620 == 1620.21 = (1612.47 + 1627.95)/2
1450 == 1451.23 (see Retracement table, reference frame 4, 0.786, highlighted in light blue color)
chart 4
Here's What 14 Top Wall Street Strategists Are Predicting For The Stock Market In 2014
Steven Perlberg Jan. 2, 2014, 9:05 AM
For 2014, the average call is for the S&P 500 to hit 1,955, with the median prediction at 1,950.
Read more: http://www.businessinsider.com/strategists-2014-sp-500-targets-2014-1#ixzz2sh5hU0AF
In particular, Goldman Sachs
Nov. 21, 2013, 6:19 AM
“David Kostin, Goldman Sachs' top equity strategist, just published his 2014 outlook for stocks. His report also included his lofty prediction for the S&P 500 through 2016. Specifically, Kostin sees the S&P 500 rising 6% to 1,900 by the end of 2014, 17% to 2,100 by the end of 2015, and 23% to 2,200 by the end of 2016.”
Read more: http://www.businessinsider.com/goldman-sachs-2014-sp-500-outlook-2013-11
>> 1790 or 1798 the resistance? . . . .
ahimsak: a decent call on 1798. (actual 02/07 1798.03).(01/30 1798.77)
I refrain myself from over-guessing. Barring any major upward movement (> 1826.28), the observed trajectories 'suggest' S&P500 may poke into the range of 1685.11 - 1615.33.
Hey Jonny
You can upload charts from your own computer via this link: http://forexrainbow.com/index.php
It gives your chart a time stamp
free service & handy to use
Ops: (I may miss read your question, I dd not use Rainbow as my userid)
02/07/14 . . . . . . . .
continued from prior discussion on 02/06/14
There are 7 retracement frames in the following chart & Table.
use frame 3 as an example, it is from 1847.47 to 1560.33.
Table link http://forexrainbow.com/images/28250003805511906708.jpg
Wave set 1,2,3 is highlighted in red, blue and purple color respectively. E-waver’s gobbledygook count is not necessary in this discussion because the structure is very simple & straightforward
So far, index has retraced a nearly perfect 0.382 in reference frame 3. In overall, Bull still holds the upper hand firmly.
chart link http://forexrainbow.com/images/35314137629749863956.jpg
Frame 3 ( The supportive trend line & Fibonacci shows their beauty respectively)
http://forexrainbow.com/images/93980009758988936562.jpg
Cosan Ltd. (CZZ) - NYSE . . . .
------------------------------------------------------------
CEO briefing, gaps up, needs good volume
02/06 CEO moves into a trade-able range
02/06 close 152.51
02/07 intraday high 157.13 (in progress data)
-------------------------------------------------------------
Cosan Ltd. (CZZ) -NYSE
CZZ exhibits a clear 5 down wave structure (count for easy referencing only, not an Elliott nomenclature). The projected wave 5 terminal point is 10.91 (1.7860). On 2/03, it marked an intraday low 10.93, and then bounced off. This action opens a buy opportunity window with moderate risk, a tight Stop at 10.62 +/- (05/20/2011)
Do You own DD
chart link: http://forexrainbow.com/images/97257262414908027935.jpg
chart link: http://forexrainbow.com/images/47665906213775018594.jpg
CEO (CNOOC Ltd NYSE) . . . . .
CEO moves into a trade-able range,
Dividend 4.82% ($3.22, $4.13 in 2013)
do your own DD (fundamental, STOP point ... )
chart link: http://forexrainbow.com/images/93029856025297404671.jpg
(Ops... intended to be a new post)
02/06/14 . . . . . . . .
At the ‘do or die’ moment on the time length for this intra-day bounce from the minor low 1737.92; The bounce time length determines the delay to see another low towards the last week of February.
Numbers in italic are the projections (see table) from the wave extensions & Fibonacci retracements. those in grey are actual numbers. (1768.10 is a wave extension @1.000 , I will release the wave table is a separate post, let's go step by step)
Table link http://forexrainbow.com/images/28250003805511906708.jpg
chart link http://forexrainbow.com/images/71579055055849810366.jpg
archives
---------------------------------------
I speculate that this correction will extend to the last week of February.
The projection is in the range of retracement 0.3236-0.4465 in reference frame 4, +/- one Fib, range 1684.34 - 1622.38 +/-. (see table)
HI Oddlot . . . . . . .
See if you can delete a MSG I posted, it is way off the topic
MSG # 14784
Thank You
(off topic) Indeed, very intriguing .. .. .. .. ..
They are the Urban management officers from Urban administrative enforcement Bureau . ( http://www.baike.com/wiki/%E5%9F%8E%E7%AE%A1 )
Some of them engaged excessive brutal force and granted bad public images.
http://news.xinhuanet.com/legal/2007-10/29/xin_582100429072439042057.jpg
http://img10.itiexue.net/1428/14284150.jpg
http://m1.aboluowang.com/uploadfile/2013/1019/20131019013618799.jpg
Hey! your "Yuan T Shirt" is "tarnishing" the Republic's 'dignity'
NO No no.... This is the art performing in the street.
http://www.edu-sp.com/static/Image/20090305/20093584618.jpg
YouTube:
SPX Updates . . . . . .
Intraday hits 1737.92, the projection (see table below) is 1737.78 (reference frame 3, 0.382)
I speculate that this correction will extend to the last week of February.
The projection is in the range of retracement 0.3236-0.4465 in reference frame 4, +/- one Fib, range 1684.34 - 1622.38 +/-. But, I am not sure index will get there in February, step by step, let's see.
Numbers in italic are the projection from the wave extension & Fibonacci retracements. those in grey are actual numbers.
I will explain how to calculate 1847.47 and 1854.12 in the coming days. There are good reasons the table use 1847.47 instead of the actual high 1850.47. in brief, using 1847.47 provides much better projection quality (1823.63, 1815.32, 1800.03, .....)
chart link http://forexrainbow.com/images/22067669876712182039.jpg
Table link http://forexrainbow.com/images/28250003805511906708.jpg
To give an overall picture, Here is the chart I did in September 30, 2012:
chart link: http://forexrainbow.com/images/96164382991989141043.jpg
September 30, 2012, 8:24:46 PM, time stamp link:
http://forexrainbow.com/viewer.php?file=96164382991989141043.jpg
>> Here's a Bloomberg report on China's RE
jumanji: Thank You for sharing your information.
In addition, I can read all these relevant reports from Chinese web site directly. In fact, each case has been tracked in great details. For example: http://topic.eastmoney.com/zcxt2013/
Let me say this way, these issues will not bring down such a big nation. Take it easy.
>> It's not just ZH that's warning about China
avoid "not see the forest for the trees"
China central government loves to see those housing speculators & corrupted officials to “die” quickly. They have the guts cutting the bad arm and save the body, one good example was the collapse of their stock market right before the 2008 Summer Olympics, they 'goosed' it intentionally. The former Premier Wen Jiabao said very clear in 2012 that they “switched” the growth gear. China runs a planned economy, they know what is the top priority; Many hard infrastructures and monopoly break-through took place quietly in the last 5 years. Watch China's activities in Eurasian nations, Germany, Russia, Turkey .. ... and China are working together ...
In the south America, 'the backyard of Monroe', China moves on step by step, PetroChina announced in January an investment more than $10 billion to help finance Ecuador's Pacifico oil refinery project, a joint venture between Ecuador's state-owned oil company PetroEcuador and Venezuela's state oil company Petroleos de Venezuela.
There are many good reasons to be optimistic
This is not a political forum, ..... but let me 'stir up' the confidence
Condoleezza Rice Speech
"We've been through terrorism, we've been through two wars. Our economy is in danger of stagnation again. People are unemployed. We have debt that we cannot pay and are still borrowing money that we cannot afford. Americans are tired.
I sense that there's something that is deeper,............ And that's the beginning of a questioning of who really we are.
But you know, I'm actually an optimist and believe that we will get it right, and that the United States will continue to lead, believing that free markets and free peoples hold the future. And I've come to this not because of some rose-colored glasses understanding view of the United States. No, I'm optimistic because so many times, I have seen the impossible seem inevitable in retrospect."
.
>> Debt is the problem and China has a huge debt problem
RE: Watch China
[quotes in italic fonts]
To reply with your quoting info about China debt status directly:
On 12/30/2013, their National Audit Office ( http://www.audit.gov.cn/n1992130/index.html ) released (China) National debt audit report ( http://news.xinhuanet.com/fortune/2013-12/30/c_125934620.htm ). The total debt vs. GDP is 39.43% which is lower than international "Defato" standard debt ratio 60%. A general description can be found in http://news.xinhuanet.com/2014-01/08/c_125975971.htm. In overall, the governmental debt is controllable, a few local provincial zones show some potential risks. Look at these debt spectrum [via the afore mentioned links] you will realize that those debt is largely tied with the execution of long term economic development policies, seeds for a brighter future. trade in short sacrifice with long term prosperity.
China Says Local-Level Debt Soars, Stirring Fear
By NEIL GOUGH
Published: December 30, 2013
http://www.nytimes.com/2013/12/31/business/international/chinese-local-government-debt-up-13-in-6-months.html?hpw&rref=business&_r=1&
A China debt crisis in 2014?
By Robert J. Samuelson
December 31, 2013 at 5:06 pm
http://www.washingtonpost.com/blogs/post-partisan/wp/2013/12/31/a-china-debt-crisis-in-2014/?tid=pm_pop
further discission:
Don't be haunted by those negative info. Not only China, the already laden debt & future entitlement in US is an insurmountable mind hurdle that hinders any optimistic outlook. So, pessimistic speculators draw to a gloomy conclusion that the ultimate collapse is invertible. ....... If you continue mounting on that direction, You put yourself in the shade. The key is try to think in a way outside that dark box.
let me quote the famous: [A Tale of Two Cities - Charles John Huffam Dickens] It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way. .
In a very good odds, the history wheel will ride on the righteous rail. therefore, a big surprise to those doomsday believers. Both US and China, and the world has a very bright future. The current status of China is like a compressed coil spring, soon She will release the energy, transform from a big nation to a big-and-strong nation.
December 14, 2013
By THOMAS L. FRIEDMAN [who wrote ‘The World Is Flat’]
http://www.nytimes.com/2013/12/15/opinion/sunday/friedman-dear-president-of-china.html?ref=thomaslfriedman
“Anyone who is telling you that American policy makers want to see China fail doesn’t know what they’re talking about. Our two economies and fates are totally intertwined today.”
A Tale of Two Nations .... a saga to be continued
>> Watch China . . . . . .
>> My comment ('jumanji0881): the big domino is China
You are touching a complicated topic, it can not be realized in a few posts you have released in the recent weeks. When we address an issue, we shall look from different angles and think outside (the debt) box
Let's start from one of the angles:
China has invested 781.5 billions USD worldwide, mostly from 2009-2013, what that means? It means there are solid economic policies that aims on long term strategy
>> (HD) this is all you need to know.
I know you feel alone, you've got to find yourself. Where you are now?
I want to know
(there are 8 hours time zone between China/Taiwan/HongKong and US, I don't think you are posting from your host town)
Wednesday, 06/20/12 09:40:49 PM
back to my home country
upp: I have been in US in past 25 years, but can't stand all the nonsense in past 12 years, so back to my home country last year.
sign off from this thread
resume posting in this thread .
trade safe, and good luck
There are times when silence is golden,
and one of those times is at hand
Something's definitely going On,
and that is definitely going wrong
Off the grid, enters the lurker mode.
Major events lies ahead
July 18, 2012 12:12:03 PM
The Fibonacci time zone cluster falls on July 19, August 03, August 17, and September 25
On September 17, 2012, it is the 2000 * PI trading days from October 19, 1987 Black Monday.
http://forexrainbow.com/images/64047173815057030483.jpg
Sunday, July 29, 2012 1:18:55 AM
108 trading days cycle - In summary: 92 is due on 08/10, 108 on 09/04, 124 on 09/26
http://forexrainbow.com/images/04014322269663554378.jpg
Note: one 18 calendar month cycle equals 377 trading days, or 3 X105 ( = 100 * PI) trading day cycles plus one harmonic 62 trading day cycle.( = 13 calendar week cycle, due in this coming December, the exact date will depend on how the current 105/108 trading day cycle deploys)
index enters the target zone 1389-1450
have started the accumulation of short positions via reverse ETFs
The merit of Waiting vs Actions
let's see: 'Opportunity Cost'
http://www.investopedia.com/terms/o/opportunitycost.asp#ixzz22V3CwSIj
August 1, 2012 2012 Monetary Policy Releases
Release Date: August 1, 2012
For immediate release
Information received since the Federal Open Market Committee met in June suggests that economic activity decelerated somewhat over the first half of this year. Growth in employment has been slow in recent months, and the unemployment rate remains elevated. Business fixed investment has continued to advance. Household spending has been rising at a somewhat slower pace than earlier in the year. Despite some further signs of improvement, the housing sector remains depressed. Inflation has declined since earlier this year, mainly reflecting lower prices of crude oil and gasoline, and longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee anticipates that inflation over the medium term will run at or below the rate that it judges most consistent with its dual mandate.
To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. The Committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant an exceptionally low level of the federal funds rate.
http://www.federalreserve.gov/newsevents/press/monetary/20120801a.htm
2012 Monetary Policy Releases
Plain English: The Federal Reserve said Wednesday that the economy is losing strength and repeated a pledge to take further steps to stimulate growth if the job market doesn't show sustained improvement.
DD: The plan is to be flexible,
we do our best sand-plate drill, spare a 'what if not' option.
I wish you have a happy trade.
Now it is Benny's show, the jesters surround the stage seems working harder than ever. they spent a lot of time beating the drum,
just wait for two more hours. He will pop up.
let's hail... Yes Benny.
'Don't fight the Fed'
Hi Oddlot
I use major Fibonacci/wave point as primary factor, cycle is a supplemental guide. current Fibonacci zone is 1381-1450 and 1490. (1478-1480 is too obvious)
RE resonant cycle
HI Peter
"Now it occurs to me that perhaps natural frequency is always present but that an event causes a separate resonant cycle which runs at the same frequency and concurrently with the natural frequency up until the energy generated by the event has dissipated.
Does this make sense?"
What you described can be demonstrated by the following chart, it is true.
Re: periodicity
Hi Peter
A conveyor belt can be adjusted to move with unnoticeable speed ripples; When loads it with a few heavy boxes, the belt speed is becoming unstable. Once the load is removed, the belt speed returns to its normality. I think this simple analogy answers all your questions. However, the complication is that the stock market is not a linear time-invariant system, perhaps , its natural frequency drifts from time to time, therefore, its resonant characteristic to an external driving force is drifting too. That leaves a few dominant cycles, for example, the Four year Presidential Cycle still persists with relative consistency. The following chart showed 3 complete different chart patterns during the time period 1994 to 1996. In between December 1994 through December 1995 it was an outright bull, all short term cycles were nearly vanished, and 1994's and 1996's exhibited complete different scripts, each one was at its own uniqueness.
Regarding the cycle, here is a Mark Twain quote
"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again - and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law...."
- Mark Twain http://www.bibliotecapleyades.net/ciencia/cycles/cycles01.htm
Re: Cycle inversion
pmiles: "So I believe that a cycle inversion (a new high when there should be a low) means that the next larger cycle has peaked and that the cycles above that have "tipped". Comments welcome"
Natural frequencies and resonant frequencies are two different physic phenomenon. Natural frequency is the frequency at which a system naturally vibrates if there is no outside interference; Resonance is a condition in which a vibrating system responds to a driving force. It is the tendency of a system to oscillate at a greater amplitude at some frequencies than at others. These are known as the system's resonant frequencies.
Since the stock market encounters many driving forces that is not act on in sync with the underlying natural frequency, therefore, the cycle inversion and phase shifting is understandable but hard to predict in a reliable way. The injections of QE, 'Twist’ with Operations, and market rally on Draghi comments are obvious examples that natural frequency can be overridden. Imho, to sort out these responses is a tough task and usually invites a self-inflected frustration.
108 trading day cycle
108 trading days cycle is a medium rage time frame cycle. this cycle comes & goes, not an easy one to catch. it is also konwn as a 20-22 week cycle, and 100 * PI /3 = 105. A few passed cycles can be found in the following chart.
The relationship with the famous Martin Armstrong (Economic Confidence Model) 8.6 year business cycle is clear:
since each year has an averaged 251 trading days,
8.6 year has 251 * 8.6 + 2 (leap year adjustment) = 2160.6 trading days,
2160.6 trading days = 20 * 108 ( off 0.6 trading day).
So, each Martin Armstrong 8.6 year cycle has 20 108 trading cycle.
Use the center 108, +/- window, we get 92, and 124.
In summary: 92 is due on 08/10, 108 on 09/04, 124 on 09/26
breaches 0.786/1389.07
intraday high 1,389.19.
index deploys the force which is stronger than what i expected.
07/19
From a technical view, both the 1389.07 and 1381.05 are important pivots to watch. the former one is the 0.786 retracement between recent high 1422.38 and recent low 1266.74, the latter one is the 0.786 retracement between all time high 1576.09 and all time low 666.79. I have an impression that 0.786 is a good gauge and can be applied for the current condition. Now, the 0.707 retracement between October low 1074.77 and the unrealized high 1440-1443.88 is 1333-1334. so, if index can surmount 1381.05-1389.07, the odd to see 1440 is increasing. A pullback but can hold above 1333-1334, there is good odd to see 1400-1403.
Bradley major turn date 07/28 (Saturday),
http://forbestadvice.com/Money/Gurus/DonaldBradley/bradley2012.GIF
Fibonacci time zone major 08/03, 09/25,+/-
http://forexrainbow.com/images/64047173815057030483.jpg
Major event lies ahead !!!! - Time window 09/17 +/-
RE: DOW 20K oe 3K
SilverSurfer: Dow 20k or 3k ? HARRY DENT: The 'Baby Bust' Is Sending The Dow To 3,000
imho, Dow may reach 18000-20000 after Harry's Doomsday Low. The low will let him be disappointed. Harry lacks the worldwide view, he lives as if he is in the center of the world. However, since 1980, globalization has been moving at a faster pace, it is the key process in the natural world. The scripts was written in the sky clearly....
Bradley Siderograph
2012
2013
2014 winter Low
2015 New Boom commences in a spectacular way.
2014-2015 ... Finally, (One) recognizes [The other] is a friend not a rival so that as such change paves a Foundation for a boom outshining any golden time in the human history.
'There will be more than one tiger on this mountain, and the other will be the good ole U.S. of A.' ( Kenneth Rapoza ).
I see 'a great temple has many pillars.', thus the era we will greet gracefully
Index retakes zone 1334-1342, sign of a seemingly forceful strength, yet, 1400-1403 may be a bridge too far.
Sigh!, MR. Godot is ringing the bell again, a famous so old waiting saga.
The show goes to what kind rabbit Ben will pull it out in the coming FOMC.
Day's Range: 1,338.17 - 1,363.13
In overall: This is the second attempt on 1376.78, the pivot 1362.92, once again, is becoming an important gauge
Thursday, July 19, 2012 10:38:12 AM
First successful attempt on 1376.78
chart 06/30:
chart 07/26: