Excess liquidity in China

The entire financial meltdown which started in 2008 was due to excess liquidity. it was a credit crisis. Credit is cyclical and periods of excess credit will be followed by meltdowns. Govt will again increase credit to solve the problem and once again we will have excess credit and then a meltdown.

China is having a strong rally currently. The chinese banks have pumped so much liquidity into the system and are lending at levels far higher than 2007-2008. One shudders to imagine the kind of crash the Chinese stock market is setting itself up

Nifty bearish in short term

As I write this post Nifty is at 3918. Nifty could easily decline to 3700-3750 levels as part of a 38% retracement of the rise from 2300 levels to 4700 levels.

Large US corporate bankruptcies accelerate

The bad news continues from the West despite the govt printing money like nobody's business.
http://www.reuters.com/article/wtUSInvestingNews/idUSN1628717520090616

The long term charts for India are very bullish, but in the short term the direction looks downwards.

Return of the bears!

Todays breakdown from the trading range of the last 2 weeks has important ramifications:

1) Nifty has broken below 34 day EMA. If this hold this could be bearish
2) Nifty had formed a head-and-shoulder pattern and it has broken down. The target could be 3600 levels
3) If we break the low of 26 may - 4090 then this could further reinforce the bear market. The gap that was created by the gap-up on 18 May looms ahead.
4) There is a global sell-off happening

Elliot wave enthusiasts are talking of wave 3 of 3 which is the most brutal.

This could prove to be the end of one hell of a bear market rally. We seem to be back in bear-land. Be prepared to make money by shorting!

We are in a manipulated bull market

There is an interesting article on how greed at Goldman Sachs is linked to ruin of millions of people and economies.

George Bush’s last Secretary of the Treasury was a former CEO of Goldman.
Bill Clinton’s Secretary of the Treasury, Robert Rubin, spend 26 years at Goldman before becoming Chairman of Citigroup and they got 300 billion from Paulson.
Goldman employees paid nearly $1 million to elect Obama.

The entire article is here:

http://www.correntewire.com/great_american_bubble_machine_0