Whenever There Is A Divergence, There Will Be A Convergence

Time For a Bounce

Well, the news about Gustav probably has already justified oil bounce for next week. Nonetheless, on the chart, you could see a tristar and a gravestone doji for last week. I was quite wrong about oil for the week but it was relatively unchanged so not much harm was done anyway.

Well the same old story...

When oil is up, we probably see gold going up and the market going down. I have emphasized this for quite some time.

Jim Rogers

Well the great man speaks again. As usual it's pretty funny when you read what he says. You can read it here. I wish to raise about what is written.

Quote: "Neither one of these guys understands what's going on, they don't understand currency markets, economies, they don't understand the world," Rogers said. "Both of them are going to cause us more problems than they're going to solve."

Give some thoughts on this.

It is a very strong statement isn't it. When you actually say that those phds and great economists don't understand the economy, currency and the world, it raises eye brows.

Again it links to the stock market. The very problem that young investors are having today is that they tend to think that economists will fix the economy and we will move forward no matter what happen. Think about japan, don't they know about great depression. But what happen in the end, they are still trying to climb out of the lost decade, the great recession. This leads to people thinking that stock market will go up in the long run.

Divergence VS Convergence

Back to some fuzzy logic. What goes up, comes down eventually. It is alright if it goes up in a proper manner, but it diverges from reality. Ultimately, a convergence will have to take place. You have an economy that is driven by debt. No great nation has actually spend their way to greatness. You need savings. Somehow, as smart as people are out there, they fail to grasp this logic. Maybe there is some conspiracy theory, we don't know but I know one thing for sure. If things continue like this, US economy will go down in a horrible manner.


When there is a diverence, there will be a convergence
Jin