A lot of people are scared to jump into the US share market. Some who have been regular investors write: “THIS MARKET SCARES ME!” They are getting vertigo. Yes, the old saying what goes up also goes down is keeping a lot of regular traders seating bullets. They cannot handle these levels and do not want to buy so they keep trying to find the sweet-spot to sell. This rally really has nothing to do with Trump. This is more about people getting really scared outside the USA and are looking to park money.

Those who ask what if Bloomberg or the WSJ reports what we have been saying; Would that cause the market to surge to 23,000 in a day or two? The answer is absolutely no way. Besides, neither Bloomberg nor the WSJ would ever quote our forecasts. So no worries. There is no way they will give us any credit for anything. They must support the bankers and New York City. That is their first and foremost agenda. They have their routine herd of analysts they quote. They are not interested in reporting what we do for then it would beg the question why quote us if the NYC bankers say no way?

That aside, the Dow has rallied to each of our resistance levels and stops there, then it pushes through the next day. There is no indication as of yet that we should expect to reach the 23000 level right now. I have warned we have critical resistance in the 20700 zone and then the mid 21000 zone. We are starting to run out of time right now. That does not mean we do not rally again into the latter part of February about the 27th.

Our critical resistance, to be more precise, is in the 20747 range and that is what we have to get through to see a spike up to the mid 21,000 zone. Tomorrow resistance will be 20658.24 and an opening above that will be strong. Overall, this rally could extend into the 27th. However, that does not mean up every single day. Support tomorrow begins at 20474.62.

The timing target for a possible MINOR turning point will be tomorrow the 16th. Thereafter, we have the 21st and 22nd then thereafter the 27th, which should produce the opposite of next week. We have back-to-back Directional Changes for the 20th and 21st. This warns of choppiness next week.

Keep in mind that turning points can be either closing or intraday. Moreover, back-to-back Directional Changes typically indicate choppiness. This is how the market responded last year to that wild serious of consecutive Directional Changes. This indicated a highly choppy period that was forming the incredibly important low.

QUESTION: Marty, you said the “main resistance stands for this week at 20505.” The Dow stopped today at 20504.41 and closed on the high. Nobody produced numbers like you do. The Dow goes up and the euro declines. I can connect the dots. Is this correct?

ANSWER: Correct. It is the capital flows and Europe is just not even discussed in mainstream media right now because they are far too busy always trying to undermine Trump in an outright war. Keep in mind that the 21,464 area is really the critical level during February. At this point, the Dow would have to close below 18,000 to sound any alarm bell. As I have been warning, domestic analysis just doe not cut it in this global environment.

Friday’s closing at 20,298.21 in the Dow was still bullish and the main resistance stands for this week at 20505. Exceeding that level and a close above it on Friday would point to an extension into next week. The top of the channel in the 20,700 area. Exceeding that level will warn that we could move sharply higher to the 21000-22000 zone. The major resistance starts at the 21,387-21,624. Keep in mind that the majority remain bearish and and most big funds remain under invested in equities. Therefore, we are looking at an amazing amount of money sitting on the sidelines.

The two key targets on the monthly timing level remain February and April/May. Keep in mind that normally this would unfold as two opposite events meaning a high in February should lead to an April/May low just before the French elections. We can see an intraday high extend into next week.

Trump has surrounded himself with a few people who believe that a new Bretton Woods conference will be necessary and they wrongly believe that a return to a gold standard will be beneficial. What they fail to comprehend is that we have had many gold standards in the past and they all failed. Why? Because government can borrow and as long as they can do that, fixing the money supply will not create utopia. It will go bust in a huge way just as the Swiss tried to peg their currency to the euro to prevent the capital inflows.

In terms of gold being involved, this is indeed a throwback to barbarous relic of the past because the financial system does not match the idea of gold being money. The problem has never been whatever we use as a standard. The real problem is the people who manage government.

The most direct solution is simply to eliminate all borrowing. The Roman Empire lasted for 1,000 years simply because they didn’t have the modern option of debt financing. There were no Roman equivalent to government bonds. The government owned all the mines. They effectively funded their operations by about 80% tax collection and 20% was funded by the creation of new money. This was a very significant burden on the Roman economy, which was pre-industrial for the most part and at least 75% of its economy was involved in the production of agriculture. Virtually all the taxes and rents raised by the imperial government were spent on the military. The military consumed about 80% of the imperial budget in 150AD.

The next key resistance in the Dow stands at 20,324. Of course, the major channel resistance stands at the 20,703 level while support is to be found at 19,568. The Weekly Projected Bullish Reversals are  20,475.23,  20,518.80, 21,882.34, and 22,188.86. These are the What-If numbers so they may change if we make a new weekly low.

Timing, we still see the risk that this week may produce the February high. Caution is necessary. February and April are the key targets on the monthly level here in 2017. Nonetheless, this still does not appear to be a major high from a long-term perspectiv

China has called all Bitcoin exchanges to a closed door meeting looking to shut down the flight of capital from China. China is looking to deal with the expected trade confrontation with Trump and looking to shut down the flow of capital that has been putting a downward pressure on their currency. We can see that the US dollar has risen for 35 months and this will be seen as a currency war by Trump for his advisers from Goldman Sachs are clueless assuming markets can simply be bullied or manipulated with power.

Our sources are also hinting China may tighten the quotas on importing gold even more since their actions last November (see FT). China is trying to curb the flight of capital which has contributed to the greenback’s rise for 35 months. However, with Europe tottering on the edge, the next country to withdraw from the EU may set off a collapse of the euro and that will only cause a surge higher yet in the dollar impacting China negatively with regard to trade disputes.

The EU leadership is really trying to make Great Britain pay dearly for voting to exit the Community. Like the socialists in American, it’s our way or no way. The left may call the right the “deplorables” but the left are the “intolerables” who refuse to ever consider they might be wrong.

The EU think that is they can make it so bad for Britain, nobody else will leave. They refuse to examine why there is rising discontent within Europe. They refuse to let go of this dream of a federalized Europe to eradicate national identities along with sovereign rights.

The EU intend to be it a mistake that the British will regret and fall to their knees. This attitude is consistent with the constant endeavor to explain all the shortcomings of the EU as insignificant and irrelevant, thereby closing their ears and mind to any possible reform. The EU constantly repeated motto of a federalized Europe will less the risk of war but nobody else takes this seriously outside of Brussels. The “European Project” is creating the resentment that fuels war. With this policy in place, the Community has refused to listen to anyone but themselves. This has led to small issues festering and creating resentment which grows into a huge problem and Brexit that has spun Frexit and all the rest.

The EU refuse to even listen to the British and chose to ignore the speeches of the British Prime Minister, Theresa May. The PM May has announced a clear separation and rejected all interim solutions by the EU, which ultimately would still lead to a dependency upon Brussels. Britain demands that each nation must decide for itself who can immigrate. Just because Merkel allowed the refugees in to help her polls should not subjugate other nations to have to endure a vast influx of something they never voted for.

Britain is not willing to surrender all domestic law to that of the EU. Indeed, EU law is no longer to be applied in Britain. Here we have the EU demanding Ireland retroactively charge Apple taxes simply because their tax rate is less that the highest EU member. That is surrendering everything sovereign to Brussels. Laws are only to be decided by the British parliament – not Brussels. Jurisprudence is a matter for the British courts not the European Court.

Britain is to leave the EU internal market and the EU Customs Union and seeks a free trade agreement to be concluded between the EU and Great Britain. The EU seeks to punish Britain for rejecting its dream. The EU forgets that Trump is now in and a trade deal with Britain will no longer be at the back of the cue as was the case under Obama.

Free movement of people, together with the free movement of goods, free movement of services and the free movement of capital, are the four fundamental freedoms which are regarded as the foundation of the EU. The free movement of persons justifies the right of all EU citizens to settle in the Union and to accept work. However, this has not worked as smoothly as presumed. The cost of living is significantly different throughout the EU. Eastern Europeans, mainly from Poland, have infiltrated Britain working for less money creating competition for domestic workers while foreign companies use cheaper labor in the East to undercut domestic companies on their home-turf.

As the economy turns down and deflation prevails, the threat of foreign jobs is being addressed throughout Europe. Add to this the refugee crisis and you have a power keg throughout Europe waiting to go off.  In view of the high unemployment in almost all countries, domestic citizens have ALWAYS turned against foreign workers as the easy scapegoats for the economic decline. This only merges with the high taxes reducing disposable income.

The EU leaders have nothing to say about the criticisms. They have no clear statement to challenge what is going on. The regulatory nightmare and outright rage that is rising among the people is simply ignored by Brussels. The legal uncertainty with the British exit on the banking system is something nobody even wants to speculate about. How do bail-ins works in Europe if abandoned in Britain? So while the EU thinks by punishing Britain they will discourage others from leaving, they are seriously mistaken. The dream of the EU is dead. It should have remained just a trade union – that was it.

What the Trump Administration is clueless about the ability of the EU to hold it together, they fail to grasp that talking the dollar down will just not work if the political structure of the EU is breaking up.