Lebanon has maintained a peg to the US dollar for about two decades and as all pegs go, this one is under pressure as the rise in the dollar imports deflation. The central bank has declared an economic emergency as it attempts to reassure people it will hold the peg. Lebanon is one of the world’s most indebted nations and it maintains its pound to a peg of around 1,507.5 to the dollar. This attempt to reassure investors about the country’s ability to repay its debt and strengthen its currency is not being considered reliable as the start of Sovereign Defaults is underway on an economic pressure. Countries have been borrowing year after year with no intention of paying off their national debts. It has been a fool’s game and we are starting to see this pressure build as it will FIRST on the currency pegs, and then on the inability to meet debt payments.

Welcome to Big Bang (2015.75-2022). We begin with peripherals and state/provincial level as well as municipal

COMMENT: Marty; I found my ticket to your Japanese session from March 1999 when you warned the audience the club was targeting the yen for March-end. You told everyone how to defeat their manipulation and that was just great. You saved everyone billions that day. They called you Mr. Yen for that one. The club didn’t appreciate that call. I heard that on the phones. I remember the yen went from 117 to 122. They lost a lot that week.

I am coming to this 2019 WEC. For someone who has been following you for decades, I understand what you mean that this is an event that has never taken place before in modern market history so we will really need Socrates this time.

May I suggest that you give a quick demo on how to use Socrates to its fullest for this event. I think it would be really helpful this year.

Cheers;

GC

REPLY: Nice to hear from you. Wow, you still have a ticket from Tokyo. That is an excellent suggestion. You are correct. I will do a demo and show how to look for the indicators because it will indeed take a computer to do what no human has ever seen before in modern times.

All the best

QUESTION: I realize my opinion is of little consequence; but I find something interesting and needed to share. After doing a lot of backtesting using many criteria over many stocks my unqualified opinion is that no fixed criteria can be used analyze stock charts over time and many stocks.

I worked with a well respected radiologist in digital imaging. In the early days of digital imaging he perform studies on what resolution and how much time was required to accurately diagnosis a digital image. He told me it came down to a very experienced person would look at an image and get an “impression” of it and not so much looking for #1, #2… etc.

From 20 years of looking at many thousands of stock charts I understand this. As a human I will never be able to write a program that will capture all the nuances my mind will in an instant look at an image. I assume Socrates writes its’ own using an immense amount of data that continually changes. Maybe Socrates can write a program to diagnosis medical images – correct a lot of mistakes.

Bruce

ANSWER: You are absolutely correct. We call it having a “nose” for trading. There is no single algorithm that you can devise or cycle that will predict every turn in a market. The reason for this is because such analysis is attempting to be employed in total isolation. Everything is connected. The Economic Confidence Model has called every turning point in the global economy, right down to the economic decline currently into January 2020.

What you must understand is that this is a global business cycle and you must view it in that fashion. For each wave, the focus shifts. One wave will be a commodity is the hot investment. The next might be real estate, This may be followed by stocks or bonds. Then the focus will shift also around the globe so the “hot” market becomes Japan, then Southeast Asia, then Europe, then America.

Then there is the major trend insofar as the sentiment. We have all witnessed bullish news unfolds yet the market responds in a bearish mode. This is because there is also an oscillating trend to how we interpret events. Just recently, the Fed lowered rate at the top of the stock market in July 2019. The market crashed instead of rallying with lower rates. The interpretation suddenly shifted and people saw it as anticipation of an economic crisis to come.

Nevertheless, the world economy turns with the cycle; some are making highs while others are makings lows. At the same time, we have the rise and fall of nations economically. This is why I say it cannot be forecast by looking at the trend of a single market in motion. While you can do technical analysis on any market, you should never lose track of the entire process. It is the global trend that will swamp a local market and a financial contagion will impact everything during a liquidity crisis. That is what happened in 1998 with the Long-Term Capital Management crisis. The problem was a loss in Russian bonds which could not be liquidated. To cover the losses, they began selling everything else to raise money. Even the Japanese yen rallied with the dollar falling from 147 to 103 in just weeks.

Global Market Watch: DJIND-D

Socrates is monitoring everything so it looks for things differently than a human analyst. Here is the Global Market Watch on the Dow Jones Industrials. It is entirely pattern-recognition. This is a different method of analysis altogether, demonstrating that a computer can have a “nose” for changes by studying the patterns in far more detail than a human. This allows Socrates to look just at the patterns and get that sixth-sense.