I should keep an eye out for the possibility that Europe could bounce until 2014.675. I need to search for facts that can tell me how long this bounce is likely to last. I don't want to be too early again, as I was on China last July 2012.
As I've been expecting, looks like we will get that a deadcat bounce in capital fleeing Europe and developing markets into the USA, which may put a temporarily top on the USA equities. Safe haven bond yields in Europe are increasing (exodus from safe havens) and US Treasury yields are declining (from recent dramatic rise) which is a combination of capital coming out of USA equities taking a breather, capital coming out of safe haven European bonds, and lower PPI placing doubt on Fed's Sept. taper.
http://www.reuters.com/article/2013/08/14/markets-usa-bonds-idUSL2N0GF0OJ20130814http://www.bloomberg.com/news/2013-08-13/germany-s-bonds-fall-for-second-day-before-zew-sentiment-report.htmlChina and Europe are both posting deadcat bounces from their declines.
Europe's bounce is all confidences increases and more debt caused by a strong Euro, very low interest rates in the safe haven countries (my Belgium friend says he can borrow 5000 Euros any time and pay 230 per month), and increased government spending.
http://www.tradingfloor.com/posts/french-gdp-soundly-beats-expectations-572561113http://www.tradingfloor.com/posts/euro-area-businesses-upbeat-economy-59627692A chart shows it is just one of those bounces in a persistent decline since 2009:
http://www.tradingfloor.com/posts/french-production-contracts-sharply-gdp-should-rise-anyway-1352928205And the big picture is still weak:
http://www.theguardian.com/business/2013/aug/14/eurozone-recession-germany-france-crisisBut the most important datum is what likely caused strong Euro, how about $1.7 trillion dollars being converted to Euros by the USA Fed!
http://hat4uk.wordpress.com/tag/french-debt-174-of-gdp/4 trillion hole in the EU banking system
US Fed ships 1.3 trillion of prop-up money into eurozone
French debt is 174% of gdp
in July this year alone the US Fed deposited some 1.3 trillion in unspecified "European banks".
So the Fed is blowing another bubble in the Euro and Europe, which provides a temporary deadcat bounce, but what happens when this 1.3 trillion flees a renewed crashing Europe back to chase yield in the USA markets (either directly or via leverage as it allows Europeans to continue to borrow and access their deposits longer).
Aug. 7 was clearly the turning point where Europe has committed to crash and burn (with the help of the Fed pushing European confidence falsely up to increase debt levels on what is already an insanely insolvent Europe), and first we get a deadcat bounce through the September elections at least.
They likely did this to help get Merkel through the September elections in Germany.
So we should get that deadcat dip in the US equities now, until the above manipulation by the Fed works its way through the system.
Then rockets up on US equities and further collapse for and exodus of capital from Europe and developing markets. The fundamentals all over the world are that debt is increasing but marginal-utility-of-debt has gone negative globally, thus confidence bounces are volatilty noise and the trend is spiraling the toilet bowl, with the US dollar at the center of the vortex sucking everything until it collapses on itself.
Then and only then, will gold make new highs:
http://armstrongeconomics.com/2013/08/14/gold-outlook/Remember on Exter's Inverted Pyramid, that US federal reserve notes are at the bottom just above gold. Patience goldbugs, patience...