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Charles Nenner Says the Market Won’t Crash Until the Fall.
Charles Nenner, technical analyst to the stars, says it is safe to buy the S&P 500 (SPY) this week for a trade because the big crash isn’t coming until the fall. You should use the current bout of weakness in the Australian dollar (FXA) to load the boat, probably sometime in July. Oh, and while you’re at it, short gold (GLD) as soon as it dips below $1,200.
These were just a few of the nuggets I was able to uncover in a wide ranging, extended interview with Charles on Hedge Fund Radio. Why should I give a damn what he thinks? Because he called the exact April 26 top in stocks in my interview with him on Hedge Fund Radio, all the way back on December 12 (click here for the call at http://www.themadhedgefundtrader.com/december-12-2009-charles-nenner-and-the-cycle-analysis-system ). He then repeated that prediction in my March 11 interview (click here for that call at http://www.themadhedgefundtrader.com/march-11-2010-interview-with-charles-nenner ). That’s the kind of record that keeps me thirsting for more. While Charles normally charges his top drawer clients a king’s ransom for his views, I managed to pry a few gems out of him for some bottles of the fiery Dutch liqueur, Jenever, next time I am in Amsterdam.
The bespectacled Renaissance man hails from Holland, where his firm, Charles Nenner Research, is based. He has a long career that includes stints at medical school, Merrill Lynch, Rabobank, and ten years at Goldman Sachs. He has spent three decades developing his proprietary Cycle Analysis System, which generates calls of tops and bottoms for every major market in the world.
Nenner developed a huge, global following after 2007, when he accurately nailed the top in the Dow at 14,500 and urged his clients to put on short positions when everyone else was steadfastly predicting that the market would keep grinding higher. I have been following Charles’ daily research reports myself for three years, and found them to be uncannily accurate. But you have to follow him daily, because the calls can come hot and heavy. Miss one, and you’re on the wrong side of the trade. Today, he counts major hedge funds, banks, brokerage houses, and high net worth individuals among his clients. You can find out more about Charles’ work at his website at www.charlesnenner.com.
My Bols drinking friend has recently had such a hot hand, that he would be the envy of the brow beating Texas hold-em crowd. He put out an alert to clients in mid April to simultaneously sell the (SPX) at 1187 and buy ten year Treasuries ahead of a deflation scare when they were yielding 4%. Within weeks, bonds delivered a ferocious ten point rally, chopping yields to 3%. For good measure, he also put out a short in oil (USO) at $88, almost instantly catching a plunge down to $67.
The wily Dutchman sees stocks bottoming this week above the recent 1,033 low, and then launching into a summer rally. Since Friday, he has been picking up early cycle stocks like Goldman Sachs (GS), Apple (AAPL), American Airlines (AMR), Amazon (AMZN), and Intel (INTC) to catch the move for a trade.
This is all presaging a much bigger spike down for stocks in the fall. Looking back over the past 100 years, equities reliably delivered 10% annual compound returns. Then in 1990 returns suddenly escalated, and stayed high for nearly 20 years. Now it’s our turn to revert to the mean and overshoot to the downside, bringing stock investors no end of pain. The next swoosh down will be more violent and longer than anything we have seen so far, so fasten your seatbelt. Ten year Treasuries will trade around a 3% band for the rest of the year.
Regarding currencies, Charles has a target for the euro (FXE) at $1.18. The doomed continent will have to suffer many years of deflation to get out of its current debacle. Since hedge funds will be reducing risk, they will be covering yen carry trade shorts (YCS), confining the Japanese currency within a ¥90-¥95 range, despite lousy fundamentals and a dysfunctional government. His favorite currency to own for the long term is the Australian dollar, which will continue to benefit from rising interest rates.
Charles sees emerging markets (EEM) remaining cool for the rest of the year, but still likes them for the long term. Ditto also for commodities, which aren’t going anywhere as long as a double dip recession is on the table. The recent sell off in copper is especially foreboding. Natural gas looks dire, and could hit $1.70 before it gets completely sold out.
Although there’s a trade here on the short side in gold (GLD), he is still a long term bull, and sees the barbaric relic eventually catapulting to $2,500 an ounce. Silver (SLV) should rise to $20.50 on the next bump up.
Nenner sees a major long term bull market in corn, wheat, and soybeans launching after the summer, once the perfect weather gets fully priced in. This is one of the few areas where you will be able to buy and then forget about it.
Charles passed several more pearls of wisdom on to me. To catch them all, please listen to his entire interview on Hedge Fund Radio in its entirety by clicking here at http://www.madhedgefundtrader.com/june-7-2010-charles-nenner.html .
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free.
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How are those RIG shares working out MHFT? Any other pearls of wisdom?
Ready, now hit it Glee club!
The man from the television crawled into the train.
I wonder who he's gonna stick it in this time.
Everyone was looking for a little entertainment,
So they'll probably pull his hands off when they find out his name.
And then they shut down the power all along the line,
And we got stuck in the tunnel where no lights shine.
They got to touchin' all the girls were to scared to call out.
Nobody was saying anything at all.
We were waiting for the end of the world,
Waiting for the end of the world,
Waiting for the end of the world.
Dear Lord I sincerely hope you're coming
'Cause you really started something.
Things got back to normal as the train began to roll again.
We got to the station about twenty minutes later.
The legendary hitchhiker says that he knows where it's at.
Now he'd like to go to Spain or somewhere like that,
With his two-tone Bible and his funny cigarettes,
His suntan lotion and his castanets.
He was waiting for the end of the world,
Waiting for the end of the world,
Waiting for the end of the world.
Dear Lord I sincerely hope you're coming
'Cause you really started something.
And then the bride, the groom, the congregation and the priest
All got onto the train when we were three stations east, yeah.
Hiding from a scandal in the national press,
They had been trying to get married since they stole the wedding dress.
You may see them drowning as you stroll along the beach,
But don't throw out the lifeline till they're clean out of reach.
Waiting for the end of the world. (repeat and fade)
predicting another crash these days is so easy.
"Looking back over the past 100 years, equities reliably delivered 10% annual compound returns."
This is complete non-sense.
Using my own 'Bullshit detection system' I am cyclically short anyone who can be a
and a
and name their firm and website after themselves. Sorry Charlie boy.
"Summer rally" will be over by June 18th Op Ex...
Why so?
I dunno... how do you think this is going to play out?
http://finance.yahoo.com/q/ta?t=1y&s=IYR&l=on&z=m&q=l&c=^SPX
Historically money was tied to agriculture. Money would come in from harvest and it would go to stocking for christmas and large buying frenzy of people stocking up for winter. We aren't subjected to those seasonal forces quite as much so the typical crash in October happens when there's a consumer downturn while the businesses stocks like there's not a downturn sucking up the available capital and letting it sit on retail shelves.
We are so cash starved at this point a summer crash is very likely. Attempting to restart the manufacturing buying cycle by lying has lead to extend and pretend in real estate, commercial real estate, state budgets. etc etc. Crash in June or July latest August. First time in history?
DOW chart warns of a rally :
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1
ok, we will rally until the next flash crash, which techies cannot predict.
It's a contradiction. Gold going down would mean the AUD goes down.
So what happens to the 150 apex that was supposed to be reached in a matter of months? No retrospective look on this one?
technical analysis is no longer useful, which is why several major investment firms shut down their charting service. ( i recall Gasparino knocking Citi for selling what was left of their brokerage unit to MS, after they cut their tech analysis group. both those calls were smart, retail full commission brokerage house? who would be dumb enough to buy one of those?) the political will to keep this market going is the question, Obama a rank amatuer bit off more than he could handle. the midterms only prove how thin his coattails are, and how tough the GOM thing is, (people in the gulf watching the oil wash up on their beach, saying, yeah but what about our jobs if you restrict offshore drilling) drill baby drill, jsut make sure you wear a condom.
but at some point it becomes clear that (de)revaluing assets is the only way out of the mess, just as trashing the dollar was the (un)official policy, trashing the stock market could be the example of do as i do, not as i say. (as B Gross says figure out what they are doing and do that thing, but be careful they don't always tell you what they are doing.
thought here is the PPT is buying gold, to put pressure on the dollar, but that invariably puts pressure on the stock market. anyway the GLD has solid support at 114, and gold is one of the few things you can trade, because there is, or was, an efficient market.
be careful those days might be over too.
recall Bernanke wanted inflation targets when he took the Fed. Why not target the whole thing? the problem is the Feds growing balance sheet of crap assets. somebody may decide to make a cyber raid
Yes, finally, please lets talk about;
Modern Portfolio Theory, and
Techincal Analysis, and
Fundemental Analysis, and
how about Generally Accepted Accounting Principles.
The old equity investment world is gone, the above no longer apply.
Mark Beck
The AUD will go down fast and hard in a "stock crash" or "derisking" environment. There is no way it goes up while stocks go down. Interest rates be damned. Matter of fact, the Aussie household is buckling under current interest rates, the RBA will get mobbed if they keep raising rates.
+1
Aud would get hammered, throw in a little unemployment here and the whole house of cards which is our housing bubble would quickly fall apart.
I know this is a great place but c'mon 8 to 10 times yearly income for a std family home is just soooo fucked up!!!
We learn't nothing from other housing market crashes, coz, its different here, must be the kangaroos LOL...
Hahaha, so, so true. Just a "sniff" of unemployment could buckle the entire housing market down there. Ain't going to end well, bubbles never do. Good luck to you.
Nenner makes wrong calls all the time!
On 12/02/08 cnbc interview, he said market would be
headed up in Jan 09, that it was a great buy opportunity at that point.
Every time he appears he talks about his perfect record, and changes his prognostication!
I dont think we have seen an end to new black swans as yet. There are enough existing swans out there now that an 'accident' could create a cascade at any moment. We are at the stage now where all it really requires is the right sort of catalyst that tips the boat, and water floods in over the side.
It's a coup, there are no accidents in this transfer of wealth...they can take this sucker down whenever they want...no one in the industry believes in recovery. They are just trading the 'game'. They need to get the laws passed in order to deal with the aftermath of the collapse.
This fiat system has entered the final stage of running it's 'natural' course of return to it's intrinsic value of fck all. End of 2010-2011 we are gonna see alot of 'accidents'.
Accidents=confusion=Fear=controllable=tyranny ... the more the 'accidents' the easier it is to shepperd the sheep. Just like when they changed America forever with 9/11, Athrax attacks and sniper attacks all in a short space of time.
Same old playbook i'm afraid but only much, much bigger.
ever since nenner lost GS as a client, his predictions are less than reliable. he was on CNBC last year this time (post losing GS as client) and predicted a stair stepping decline in the markets to a lower low than the march of 09 lows..... i think GS had a way of making his previous 'predictions' come true.........unfortunately he is now just another human....
I say the markets won't fall until The Crash.
You have it all wrong.
It wont Crash until it falls.
The only way he would know what stocks are going to do is if he has a seat on the Fed where 'it is written'
Second point...
Tech analysis is dead as a reliable indicator. It's being used by the Fed and Co. to destroy the middle class investor base. They own the fcking market and I pity the fool that does not see it.
Bang on Kina,
but I also do not expect the collapse until the latter part of the fall. Because by then Obama the will have got all his tyrannical laws (Cap and Trade, Enemy Belligerent Act, Cyber Security) passed by then. People should be awake to the fact that free markets are already totally dead. The elections are not of any importance at this stage because it will be a twoperiod lame duck presidency and absolute fcking carnage but giving the incumbent democrats the impression that they are still in recovery mode will give them a more secure chance of staying in their seat. Far easier to agree to corruption and unpopular draconian laws if you think your party has enough support to get you over the line in November.
he won't make it through the primaries, hillary and her gang are making sure of it right now
BS