Summary for Week Ending 30th June 2007
The past 2 weeks has seen the market maintain its Range Bound state. The added sideways movement has flattened out the rising trend and is now in keeping with the previous advance. Of course the question is where to next and the answer is still the same. The advance is still in place and will remain so until we see a decline that exceeds the previous greatest decline in this advance (107 points).
In the past week we saw the market make a dalliance with the 56 point range which goes way back to July 2006. the market did bounce on this minor extremity and we will have to wait and see if we are to get anymore. From an Elliot perspective we are now at 3 waves of correction with close to wave equality for the 2 waves down. If we are to see a final thrust upwards, then a Flat wave 4 is usually indicative of the strength of the final advance. Of course we have no proof that this correction is over, but it must still be looked at closely.
Going off topic a little, I'm still confused by the price of Oil and the impact it should be having on the economy, the world economy that is. If Oil has risen so sharply over the past 3 years, then this cost must be translated across into higher prices for everything. This is not really apparent and inflation numbers are still low. I can only assume that somewhere along the chain, the added cost is being absorbed. Where this is happening I do not know as yet.
There is more and more press being assigned to the issue of Peak Oil. If the scenarios are correct then the future should be inflationary which is bad for those holding cash but great for those holding tradable assets. Times ahead appear very cloudy...(my 2 cents!)
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