Use the ASX as an economic barometer.

Hi readers 

Has the links to the chain started to crack or is it just a pause.

Corporate earning isn't meeting expectation, so is it a case of expectations too high or is it companies not performing on all cyclinders.

There could be a case for both but this attempt to try and handcuff the fed is very dangerous.

In the event of a collapse the fed has all but 2 bullets to fire and to be honest there not really capable of serious penetration.

So it's my view that the Fed needs to keep raising rates regardless of the stock market, as the domestic US economy is proving to be resilient.

Europe has negative rates, Japan also has negative rates.

In the event that the U.S. goes negative then global recession for a decade will follow.

I say this because I have been doing the astrology for the U.S. economy for the next 2 years over the last week and there are road we seriously don't want to get on.

It's true as the Fed explands it's money supply the Stockmarket moves higher, but right we need to see some sort of justifications for the price level the Stockmarket is at .

 

Here is an interesting  fact. 

Before the Global meltdown all markets around the world kept peaking up making new highs.

Since then most markets have gone back up there and have made higher highs. Except Australia.

Australia still has seen the 6700 level now almost 5 years.

I say this not to pick on Australia.

I say it because Australia doesn't have reserve bank intervention in the Stockmarket.

It's not permitted in there charter of economic policy.

The ASX is used by many large hedgefunds as a barometer of the world economy.

Right now it's seriously doesn't look good, and while governments around the world are looking to make cuts to services and raise taxes, that's not how you promote growth to get out of the mess they have created.

It's my believe that until governments around the western world drop this west minister system and move into an Asian system there will be no serious growth.

In markets

For the month of February for those who are asking for my results..

ES -17 on closed position..

I do have open positions in both the SPI and ES..

We saw some margin selling yesterday in markets so it will be interesting to see how hard it bounces back...

For Ash and Christian in Austria if the ES closes under 1734 then you will see some huge fund liquidation,but until then I don't see this happening, until maybe April tax selling , but till then very early .