Inflection Point Coming?

by JDH on October 15, 2011

This could be a very interesting weekend, and week. The Occupy Wall Street protests are in full swing, and have spread to many other cities. Even Toronto gets to have it’s own, imitative, protest. Of course occupying a street in the financial district while all of the business people are at home for the weekend will probably have minimal impact.

And if the protestors thought about it for a moment they would realize that the Occupy Wall Street movement is occupying the wrong street, because it’s the government’s reckless spending that has caused our problems, not the corporations that have admittedly been the recipients of most of this largess.

So the question is this: is the economy, and the world, reaching an inflection point, or will it be more of the same?

It’s an important question.

The markets, clearly, are at an inflection point.

Since August the Dow has traded in a range from a peak of 11,613 on August 31 to a bottom of 10,655 on October 3. Today we sit just above the upper end of that range, at 11,644. A technical analyst would tell you we have “broken out” of the trading range, and therefore the market should continue upward to challenge the July highs in the 12,700 range.

That’s quite possible.

Over the next week or two we will see whether or not we have broken the trading range or not.

The Occupy Wall Street protests may be a non-event, or they may be disruptive enough to drive the markets lower.

Those of you who follow the work of George Ure at Urban Survival, and Clif High’s predictive linguistics work at HalfPastHuman, will know that George and Clif are expecting the October 15 to 17 period to be a period of “emotional dumping” after the build up in tension that has occurred over the last few weeks.

Clif’s data runs further predict that a large, multi-national corporation will fail, perhaps due to some scandal. Initially it will look like good, positive, news, before everything hits to crapper. His prediction is that the event of this weekend will lead to big problems in the markets on Monday.


That would certainly qualify as an “inflection point”.

I like to read George and Clif, because they provide an interesting perspective on the world. Unfortunately their predictions are usually wrong. Or, more specifically, their predictions are proven correct, but their timing is wrong, and without proper timing a prediction is useless. George admitted this week that his portfolio is down for the year, despite being up over 70% earlier, so even those with a window into the future sometimes can only see the fog.

So will the market crap out on Monday? Probably not, but longer term (Tuesday?) a collapse is inevitable.

I’m currently sitting with a few short positions as insurance (RSW – Rydex Inverse 2X S&P ETF), and I’m holding my gold and silver positions, and will continue to add to them on any weakness. I realize that in a market crash everything goes down, including precious metals, but I expect they will bounce back first, so I will continue to hold.

Time will tell when, and if, we reach that inflection point.

Thanks for reading, and hopefully we will all have a good week.

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