This page has been archived and commenting is disabled.
Technical Analyst Charles Nenner Predicts the Market May Crash in April
After much pleading and cajoling I managed to get a no-holds-barred, no stone unturned, 40 minute interview with technical analyst to the stars, Charles Nenner of Charles Nenner research in Amsterdam, for Hedge Fund Radio. Bottom line: A second deflationary tidal wave may hit the US as early as April. The Dow could crash, possibly heading for a double bottom at 6,000, and bonds could go up for the rest of the year. Oh, and by the way, crude oil futures are discounting way with Iran by 2013!
Once this deflationary scare burns out, the greatest trade of your lifetime will set up, says Charles. This is the one where you pile on the leverage, take out a home equity loan to get a still bigger position, and max out your credit card to cover your living expenses. Get it right and you’ll never work another day again, you can pay off your home mortgage, and get a building named after you at that college you can’t stand. The bad news? This trend could start tomorrow, or in two years. Blow your entry point, and you’ll get wiped out.
Since Charles has had a particularly hot hand lately, calling the top in the US stock market within four days, months in advance (click here for my December 12 interview with Charles at http://www.madhedgefundtrader.biz/Charles_Nenner.html ), he has major hedge funds relentlessly banging on his door for his next call. I managed to track him down late last night at his home in Amsterdam, where I extracted an update on his global view.
Charles is talking about shorting the 30 year Treasury bond, a trade I’ve been yammering on about for the last several months, and seems to be on the verge of breaking a 29 year bull market trend line. The yield on this paper, now at 4.55%, will gyrate between 4.25% and 5.07% for the next year. Then sometime in 2011 we will break out to 7.5%, possibly very quickly. That would take the bond futures from 119 today to as low as 82.
But that’s just the opening act. Once inflationary fears take hold, the 30 year yield could fly as high as the November, 1981 high of 13%, bringing the futures down to 53. The Armageddon scenarios you hear about today could take it lower still. And this is all in a contract with a margin requirement of only $3,240 for a $100,000 position, giving you 30:1 leverage. No wonder the big hedgies are salivating.
Keeping this interest rate scenario in mind, I then pinned the erudite Dutchman down to calls on every other major market. The S&P 500 may grind back up as high as 1145, and then the next big move is down. The dollar is over extended here, but he sees it eventually moving to $1.18 against the Euro. The yen is ready for a big move down after peaking around here, initially targeting ¥105. Traders should take profits in the Ausie/Euro cross at 68 by May. Crude will peak in the low eighties by the end of March, and then begin a one year decline. Copper could also peak then at $3.73. Gold has peaked already, with Charles bailing on his longs at $1,220/ounce, and we are now in a downtrend that will last for some time, until the above mentioned inflation fears kick in and take it to new highs. Natural Gas looks terrible, having just peaked at $6/MCF. It’s headed downtown, first to $3.80 and then to $1.70. Gulp!
What is the one trade that Charles would put on today? Go long the Ausie/Yen cross, where you go long the Australian dollar and short equal value of Japanese yen at today’ price of $AUS 0.80. Charles’ calls were so hot, my hand was sizzling when I finally put the handset down.
Charles has a long career that includes stints at medical school, Merrill Lynch, Rabobank, and 12 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. Charles developed a huge 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 predicting that the market would keep grinding higher. I have been following Charles daily research reports myself for two years, and found them to be uncannily accurate. Today, Charles Nenner counts major hedge funds, banks, brokerage houses, and individuals among his clients. You can find out more about Charles’ work at his website at www.charlesnenner.com.
To catch my entire sizzling interview with Charles Nenner, please go to www.madhedgefundtrader.com/ and click on the “Today’s Radio Show” menu tab on the left. This will no doubt be the hottest show of the year.
For more iconoclastic and out of consensus analysis, you can always visit me at www.madhedgefundtrader.com , where the conventional wisdom is mercilessly flailed and tortured daily.
»
- advertisements -
Or, the hyperinflation could already be discounted in the price of gold, which caused the huge run without much inflation over the past couple of years.
In that case, gold is already predicting the hyperinflation and its already priced in to gold now, as it is.
"gold is already predicting the hyperinflation and its already priced in to gold now,"
and so could the stock market
"Recovery" is for the politicians, reality looks different.
Nenner could be right but then again he could be wrong.
ZH-
guys got a great track record, timetable might be off some, but he lead me out in 2007 and back in mar 2009---i owe him years for me in the bahamas on my boat already.....i am listening, and he is not that far off from my sentiments anyway.....
where is that idiot that likes to scream "gold bitchez"?
he will be in the soup line with his mountain of duckets.......
My rant as I understand it, so far.
There is a deeper and stronger link to gold, both fundamentally and philosophically (as first enunciated by Aristotle), that modern theorists either dismiss, ignore, or are ignorant of; ie, gold as excess savings = liberty. Gold as money = Liberty.
The founding fathers understood it, Newton, understood it, Greenspan understood it, Bernanke understands it, the Rothchilds (et al) understand it, money printers understand it but the masses have been educated and at the same time conned into believing otherwise. First, educated into believing that debt instruments are money and that savings in them retain their purchasing power, and secondly, conned into chasing yield to protect the purchasing power of savings ( a response to value decay). Oxymoronic!
Why is it that the fruit of ones labor is destroyed after the exchange of values ie. time for cash?. Your contracted labor costs (time) are perennial but the value of the currency you have been paid in is open to devaluation, after completion of the contract for exchange? Your saved labor gets devalued, goddamn it!! Aren't you fucking angry?
If your numeraire is a yardstick that holds its value, and your paper currency is directly linked to it, debt issuance wont have a destabilizing effect on savings. That is LIBERTY...... LIBERTY from deception, LIBERTY from subservience.
Fuck this tail chasing shit. Look around you, you are unemployed and gambling to make a living and oh so fucking chuffed with yourselves when you get lucky with a call. This isn't wealth building, it's coupon transfer. It can't work and it won't work, as is evidenced by the amount of desperation and corruption you are living with every freaking day.
This isn't a zero sum game, boatman and MB. Your winnings have been someone else's losses. Your wealth transfer has inadvertently affected someone else's bottom line. Someone else's winnings have affected your bosses bottom line, MB. That is why you're unemployed and that is why the country is fucked.
If you don't own gold, you don't own money. If we nationally have gold somewhere, it is encumbered, our debt dictates so.
Sincerely, have a nice day, as there ain't much else in the vault.
Yeah, those people have been damn quiet lately. Every time gold goes up 30 bucks, they somehow magically appear to post my bearish predictions. Then it drops again, and it's like... *crickets chirp*
I've been telling them that gold was going to drop since gold was peaking and there were polls here "Will gold go to 2000 by April?"
I knew then that the bubble was on in gold. These people think that they are somehow not "retail investors". The truth is that most of us here are retail investors. By the time an investing idea is popular with retailers, the jig is up.
I don't want anybody to lose money on their investments, but that's why they shouldn't keep buying gold now, and should probably look into getting rid of the gold that they bought at higher prices.
Gold has been prices between $1050 and $1150 for about 6 months now with a couple small spikes upward in that time. A $30 move doesn't concern me at this point, in either direction. Gold is in a range and when the trend line moves clearly out of that range would be time to watch.
Having said that, I still think deflation is the next big act in the theater of the absurd. But I disagree with you in that this deflation is going to be worse than anything we've ever seen, including the Great Depression. I expect the "Great Recession" to morph into the "Greater Depression" in the next 12-24 months. There is still way, way, way too much debt outstanding that can never be collected at its current mark-to-fantasy pricing. Actual collections will run from a few cents on the dollar to maybe $0.30 on the dollar tops. And I mark that $0.30 on the dollar based on what I see happening with each bank closed by the FDIC, and other such actual market resolutions to existing debt.
The US is in a trap that the hyperinflationists miss - the US cannot inflate faster than the rest of the world or else it will lose its status as the world reserve currency. The Fed, faced with the choice between losing its source of power (the dollar as the global reserve currency) versus bankrupting the rest of America, will surely choose to bankrupt the rest of America before it gives up the levers of power. Indeed, a massive deflationary collapse further enhances Fed power over the entire world as other currencies are hyperinflated to try to "cure" the depression but then collapse in failure. This leaves the dollar as king, a sort of one-eyed man leading the blind.
Sometimes I wonder if deflation was the goal all along. It allows those in power to grab real assets at firesale prices while at the same time strengthening the dollar, which further entrenches the banking class. Hyperinflation is just a ploy by politicians to buy more time for one more election and it destroys the currency. Deflation is a move by a master chess player who wants all the pieces for himself and his is planning his next 10 moves at the same time. Nations that have hyperinflated had direct control of their currencies. So far the US does not. In fact, the bankers themselves control the Fed which controls the currency. So which scenario makes more sense? Destroy themselves and the very thing that gives them their power (the dollar) to try to save politicians for one more election cycle? Or destroy the middle class to obtain even more long term control over the real economy?
Middle class is destroyed. I agree it is a plan.
We are fighting for our lives , or should be.
Pirates have taken our country and our future.
We must take it back. Simple as that!
See what you need to do is to take the emotion out of it and regard gold as a currency - a currency that is not associated with any one country. As such, gold is a hedge against the devaluation of all other currencies. The reason to hold some gold is the same reason that it makes sense to buy shares in foreign companies, namely diversification and the spreading of risk.
Do you have any money?
Your personal experiences are forecasting DEPRESSION for you right in the face, yet you say to sell gold?
Buy what then? Because, dude if what YOU are seeing with your own two eyes is true that means that receipts are going to collapse and if rates balloon like the guy says, the FRN is going to tank. Where do you put your money or do you have any?
trav - you bring up a good point. You have to listen with discerning ears here. You don't know if someone is typing from their parent's basement because that's where their business decisions have led them, or they have actually made some serioius coin and have proven that their decision making is worth listening to.
I'm not typing from any parent's basement. My parents don't even have a basement.
I've paid for much of my tuition with money I made trading, and saved the rest of what I could from working.
I bought stocks at the March 9th lows.
I owned Wells Fargo at 9 bucks a share, BAC at 5, and F at 1.50! (Oh, and HIG at 5 something!) Of course, I've taken profits on all but F as it stands now, but I'm still way up.
I made 25% in the recent drop by trading FAZ.
Just because I'm young doesn't mean that I don't have a clue.
This type of shit is why you are not taken seriously.
Yet you have no problem flooding this forum with comment (lengthy too) after comment.
Because I made money trading? I don't get it.
MB, see my rant to boatman. I want to know if it holds any water. Al.
MB. In a previous posting you essentially said... "I know a lady from India"....... who comes to America to earn a high powered currency to spend in her country,...... because ....... (her currency being worth less), the exchange rate makes her rich in India.
The way your next statement reads ....... That's what we need in the States. For that situation to work for us in the States, don't you realize that you would have to have the inverse situation in currency valuations.
Your statement that followed therefore is unbelievable .... "I guess that's another reason why we need the dollar to fall, so that our labor markets are more competitive.", ... Wow! So we devalue our currency and devalue our savings so that we can be rich! Look what they (learned) you at school. How much did that cost again?
I was looking for persuasive arguments from you but I see that you have yet to swallow the red pill.
No need to respond to my rant to boatman. I'd rather wait until the pill is absorbed.
To whoever gives a damn.....what we think
is the stuff of creation. Lets think, act and speak well as best we can . Old sayings are valid, ie. as ye sow , so do you reap. Well tended garden of the mind and all that. Its has validity. Some call it Karma.
I have only one regret..that i too must share the Karma created by assholes i have never met.
Meanwhile theres no good to be had antagonizing one another. Granny dont approve.
As close to a sermon as I will get this year.
LOL ..best wishes to all of you.
Too much information. we don't need to hear all your gory details because frankly no one gives a fuck.
So let me re-phrase my first comment because this is not the first time I have seen you post 650 time on one story. Shut the fuck up!!!!!
Sorry but as you can see I am not the only one complaining about the volume and content of your posts.
You are a young man I think and perhaps still slim? If you have the length and flexibility, why don't you blow yourself?
Continue to make an asshole of yourself though by all means!
Okay, well the other people that don't like my posts can not read them or go fuck themselves too!
Do you really think I care? Obviously, others respond to them and converse with them.
The people who don't like it can really get bent. I'm not hurting anybody, and I'm hardly causing any problems. So really, the solution is simple. Look away. Or, complain to the wall. You'd have a better chance of it listening to you.
But you keep responding?
I wasn't referring to you in particular. It's just a challenge for board readers
after doing a lot of research we reverse mortgaged our house, paid most other bills and bought a 1,000 0z silver. No regrets, even if it goes down in dollars i could care less.
On the other hand i no longer care to accept USD for my labor. The dollar is just pathetic. A ten ounce bar of silver in my hand FEELS like value.
It does so because of all the energy that was put into finding,digging and refining and fashioning the bar.
Master Bates feel free to have your point of view.
But please quit beating on about it. It makes me think you work for Nadler on the side! LOL
Working for Nadler would be much better than the job that I have now!
I understand that it gets on your nerves, just as much as the answer to everything under the sun as "gold bitchez" gets on my nerves. I've tried to stop being an ass about it at least.
Also, I don't live with my parents. I live in a very meager apartment, the same one I lived in when I was making 60k. it was living well below my means then that allows me to be okay now!
1. Yes, I have money. (for now...)
2. I generally invest in levered ETF's over the short term to skim what I can. It works so far. Still, I haven't had the amount of time that others might have to accumulate more savings, or else I would have even more. Also, a lot of my money goes into investing in my education, which has cost me about 30k so far, with the majority of that coming out of pocket.
3. I think that where we disagree is that I believe that many of these problems have already been priced into the DXY, as it has been dropping like a rock for some time with little catalyst (compared to other fiats).
MB 10-4 on the economy .. dead wrong on gold lol
Again, its not because of any market drop in Gold,
its because the subject has been beat to death.......
Thanks for that Green One. Beaten down below the cellar level. Lets move on.
Taking this post and this quote from your above: "The only truth is that this economy is not recovering." While that may not be the only truth, is certainly is true.
Mostly, all you ever say is "gold is bad". So again, I'd like to invite you to lay out for us your scenario going forward. How does this debt-deflation / deleveraging resolve itself? How does the government / currency survive a self-reinforcing deflationary spiral?
I think that we all know that the end to deflation will come from inflation. I'm not disagreeing with anybody here that we will need more currency to absolve the problem.
Where I deviate from the general concensus is that I believe that this has already been anticipated by the markets. Gold had a huge run up with relatively little underlying inflation. People have already placed inflation into the price of gold, I believe.
Also, I don't believe that the fix will be as bad as some people believe it to be.
While I know that inflation is coming, I just don't think that it will be as bad as people think, for one, and two, I think that it is already priced into gold.
Signed,
The run-on sentence king. (LOL)
gold has not priced in any ihflation yet.
i'll post from offshore when i turn my physical into 6X earnings.
PAPERSHEEPLE!
get used to it
Agree with everything except the time table. I believe it plays out over a longer period of time. Sorry Leo, things are getting worse, not better. I deal with thousands of different companies in the mid to semi-large size as our customers at work and they all tell me the same thing. There is no work, there is nothing to do and we are going to start laying off again....probably by the end of May. You take the otherside of that trade, but hold it for a while....as I believe his time frame is too short.
I agree as well. I'm a consultant in a small firm. We're chasing people for payment, people are chasing us for payment, and we're all chasing after a dwindling share of jobs to bid on. We used to compete against maybe two or three other local firms for jobs. Now we compete with ten to twenty from all across the West.
I don't know how much longer I'll be here. Have been stashing away as much money as possible to prepare for unemployment, but with a young family there isn't a lot of fat in the budget.
Anyway, looking around, listening to people, I have a very grim sense of the business climate for the remainder of this year. Layoffs starting in May sound about right to me. A very slow, hot summer.
I live in Portland, OR where we've had a ton of young people moving here. Many were underemployed even in the good times. We'll see what they do when the reality of all this really sinks in.
Ahhh Portland... the land of BC buds and hippies. No wonder so many young people move there!
I know a couple of people in Colorado that are always going there, some want to stay! One even has Portland as her city on FB, even though she lives in Denver. (She's my ex, she's kind of lame. LOL)
Portland is great, but there are big tradeoffs. If you find the job you want, you'll make 2/3 what you make in a bigger market. And you won't be on any kind of fast track in a big national/multinational company (except maybe Nike or Intel, who have been laying people off). Considering this, housing and cost of living are not actually cheap, despite how it seems to someone moving up from California.
But I can completely understand why people under the age of 40 can fall in love with it just visiting for a few days. My advice to people considering the move: figure out what you're going to do here first. Love it so much that you want to compete with a bunch of other college grads for restaurant jobs? That's a reality for many 20-somethings here.
Here here. Agree in full. I deal with companies in the same size range day in day out, there is no "recovery", things are getting worse.
Out of all of my friends (we're all relatively young people) about half have been laid off in the last three to six months.
From my buddy who worked as a baked goods salesman, who got laid off because his company folded, to my buddy the master welder, to my buddy the master carpenter, to me, who got laid off to "cut costs." I was running the business for my owner, who spent his money all day while I handled the day to day stresses. Now, he came back to run the company to save my 60k salary, and told me "thanks, but I'm sure you'll find something else". I could go on and on with these stories.
Out of my friends who still have work, most work in a liquor distribution warehouse. This business would not be solid, except for it has a monopoly distributing many popular brands like Jack Daniels to area liquor stores without any competition.
Of my other friends who still have jobs, most are just hanging on. My other buddy who is also a master carpenter (who has been in the business for 15 years or so) says that most of the people at his company have already been laid off, and he's lucky to be working on the one project that his company has right now. When this project finishes, there is no guarantee that there will be more work.
Anybody that says that this economy is recovering clearly are not looking at the real picture.
I would estimate that unemployment for people in their mid to late 20s is probably closer to 30-40%. I could go on and on with my stories of layoffs of bright, hardworking people that never missed work. I can name at least four more people that I know directly, probably more.
The only truth is that this economy is not recovering.
Hey, I hear you there. Most of my friends are middle-aged, and things are bad for them, roughly like among your friends.
I feel very lucky that our daughter has what appears to be a secure job: a paralegal for bankruptcy lawyers.
Deflation then (hyper-) inflation. One man´s opinion.
I agree, although I see deflation in assets we already own (houses, house prices, cars, etc.) and inflation (hyperinflation??) in things we need. (Food, fuel, power, etc.) Interesting times. . . indeed!
I'm pretty much on your level. I know that we tend to disagree about gold, but I do see deflation happening now, followed by hyper inflation when people get angry and can't stand it anymore. With that said, I'm really in agreement with you.
People WILL get pissed and riot when they have no food or viable futures, and that's when the government will really crank up the presses. Personally, I believe that this is already priced into gold, but we're not really talking about gold, so I don't want to travel down that road.
Anyway, it's a rough time in America. I'm happy that your daughter has a good job. She's not lucky, she deserves it I'm sure. Many other people deserve it too, but are unlucky. Anyway, I'd never been unhappy because somebody else is doing better than me, so good!
I'm somewhat lucky because I managed to save some money and I was already a student for a couple of years when I lost my job. If I can't get another one, I can live off the UI for a while, then exhaust my savings, then if worst comes to worst - at least I'm a proven student with a 4.0. I can probably get some student loans.
Still, I'm scared for the future. All I want is the opportunity to succeed. I'm sure most Americans are in my boat.
Same age group as you dude. Been busting my hump since 15, finished school, bachelors, masters degrees, all while working. There is no easy route, but the one thing I can honestly say: be true to yourself.
Don't go sucking someone's ass just to get a job, 'cause you'll fuckin hate it and hate yourself. I see this all the time these days and I feel so bad for these people.
I basically pay my own wage, however, if I don't want to do that anymore, it's a bundle of cash from the safe, and a nice third world country/surf board for me (Thailand, Indonesia, Philippines, Vietnam, somewhere in South America perhaps?)
Good luck to you dude.
How deflated is your 4.0 GPA? Look what that is buying you now in the marketplace?
It seems rather worthless now, doesn't it? If you do go back to paying that inflated price for an American education, make sure you study high tech or anything food/ag related. You will be able to at least, get by in the Depression. Be very afraid. The good times are over.
I can see the markets tanking from here and April is not far fetched....wait till the taxes are collected and the accounting on the collection baskets show huge shortfalls, both on Fed and local levels. Everything but the politicians throats get the knife! Deflation. The baby will be thrown out with the wash.... No jobs, hungry angry people and civil disobedience to follow. Nobody cares and everyone ready to throw the next guy under the bus. Grow a pair and get your skin thick. Think survival. Ugly, and no way around it. Leave It to Beaver will look like a wet dream.....
I am accounting/finance dual major. I would like to potentially attend law school after I get my bachelors (I'm a junior now.)
I would have been an electrical engineer- but I have the mind of an engineer, and the dexterity of a disabled person. (LOL) I have a great knack for working on electrical systems and analyzing problems, but I've blown a couple of circuit boards in my day because of being clumsy too! With that said, being an engineer probably isn't right for me!
As far as high tech, many of those jobs are going to India anyway, which is why I didn't pick that, although I may just get an information systems minor instead of a finance minor.
I still stand by my decision to go to school and also to get a 4.0. I still believe that luck favors those that try hard, and also that this economic mess will get better someday. The sun will come out tomorrow, even if it isn't tomorrow.
It's not just the high-tech jobs going to India. You mentioned going to law school. Well, law firms are also outsourcing legal work to India. Indian students attend law school in the US, typically graduating in the top 20% of their class, pass a state bar exam, and return to India. There, they can perform legal research/writing (it's all done online anyway through Westlaw/Lexis), earn $35,000 USD/year, and live in a nice house with two Mercedes and all the upper-middle-class trimmings they could want. Why pay new associates 100k plus a year, when equal talent is available for a fraction of the cost?
Just another frustrating piece of the system...
I really want to go to law school, because it's what I love, but I also love finance and accounting too!
I used to debate in high school, and I genuinely had a passion for it, and even went 46-0 one year. Still, I don't know what I want to do. I just want to work hard and make money.
I know a lady from India that works as a pharmacist here, and when she goes back to India, she has a mansion, servants, the whole bit, all for her 100k salary in the U.S. And she lives pretty damn well here too.
I guess that's another reason why we need the value of the dollar to fall, so that our labor markets are more competitive.
Join the club, Bates. I'm a 20-something with an identical degree profile, and living in FLA hasn't made my life any easier after being laid off over a year ago. I was able to procure contract work (thank god the world still needs auditors... for some reason) in order to fill the gap, but that doesn't mean I'm back on the horse; all the benefits have disappeared, and I'm relying on my relative youth and my COBRA extension to carry me through. Times are certainly hard, but I understand the drive behind your educational destination. Although I was quite adept in a number of subjects, few appealed to me on a holistic level like FIN/ACC. You're bright, and although I question some of your positions, they're generally thought provoking (until you start harassing the gold bugs ad infinitum :-)). Best of luck going forward; we'll all need it.
Good luck to you too man. It's a shame that so many people like us want to work as hard as we can and can't. Anybody that wants to work in America should be able to.