Financial Sense Online Interview today

Financial Sense Online features three technicians: Tim Wood, Frank Barbara and Bob McHugh. They rotate through the weeks. FSO used to feature Tim Wood and Frank Barbara together. I always enjoyed hearing their interplay. They were together today because Tim Wood was stepping in for Jim Puplova:

I'll share a few things, but I would encourage you to listen to the broadcast. Also, watch for the transcript and print it out.

• S&P:
• may go up to 1380-1400 area where there is resistance;
• currently thinks we are in 'no-man's' land;
• 1320 is important support. A break here would yield a quick test of 1270
• If the European led the move, he would think the next major leg down is underway.
• 1320-1400--lots of noise
• If 1270 breaks, could see bottom objective of 1100-1150--may see an important bottom forming here.

• DOW downside objective: 9500-1000

• Nasdaq
• Support = 2300
• Resistance = 2400
• Capex will not save. All data points point to recession; Tech is dead in the water'
• Small caps do not do well when banks tighten credit.

• Stock market in a strong bear market
  
• Neither believe worst is over--at the very least a re-test of the January low.
  
• The way the financial system is imploding. . . a one off event that is pretty scary.
• Four year cycle (the second longest in stock market history) has topped
• 2008 a critical, critical juncture for determining if the upcoming cycle will be inflationary or deflationary (Wood):
• USD is moving into an opportunity to put in an important low.
  
• Commodities putting into an opportunity for an important top
  
• Depending how resolved will depend on whether we go into an inflationary vs. deflationary.

• CRB: CRB is putting in a blow off move. Only once in 40 decades has the CRB had back to back weeks of +90 RSI (weekly).

• Economic indicators around the world are declining. There is no decoupling.
  
• Wealth deflation: bear market in housing; bear market in stocks; difficult credit market--all are contractionary.
  
• Runaway inflation will be the easy out for countries (pay off debt with less costly money).
• Ed Hyman's emerging market economies had the biggest downswing ever.
  

These guys have been right on the money through out. Neither are perma anything. They are very smart technicians that also keep the macro-economic in view.

It was interesting for me to hear this given my earlier posts that have mentioned the concept of USD strenghthening, and the commodities in its last throes. I thought Wood's thought about the juncture of USD/commodities and how that is resolved in determining inflationary v. deflationary period to be very cogent. I've not heard it distilled so elegantly has he stated it. Do take time to listen.