Web Bot Weirdness

I try not to pay much attention to perma doomer analysis because they tend to keep you out of the market all the time if you take everything they say seriously. The web bots are such analysis. Critics say they constantly predict bad things so that every time something bad happens, they are right like a stopped clock. I won't debate the merits of web bots here. You can check Wikipedia's write up on it if you're not familiar with web bots. Suffice it to say that they are specific enough in their predictions and have enough hits vs misses to lead one to suspect that there is something to the methodology.

They seem to do better at predicting the financial markets and related human psychology storms (their original intent) than earthquakes and natural disasters. Last summer, they were predicting a transition period for September 22 to 27 into a turning point around October 7 into a financial market crash. In an article "Web Bot Report Foresees October 7 Turning Point" posted September 8, 2008 summarizing a September 2 radio show, we have this:

The Web Bots see September 22-27, 2008 as precursor dates to the main turning point date of October 7, 2008. Closely watch events during September 22-27, 2008 for hints as to what to expect on October 7, 2008.

Cliff said whenever "it" happens, and whatever "it" turns out to be, "it" will be a date in history you remember like 9/11, we will remember 10/7.

The Web Bots foresee that October 7, 2008 to February 19, 2009 will be filled with emotional intensity, and the length of the release period will be extraordinary. The Web Bots have never picked up any event lasting this long. In comparison, 9/11 length lasted about 10 days. This event will be four months of high emotion.

The Web Bots foresee consumer society collapsing by mid November 2008.

As we know now, this is precisely what happened. We don't remember the 7th specifically like 9/11, but we remember the early October crash in general and the "emotional intensity" and crazy VIX fear index running to unprecedented highs that was a psychological event of four months that ran through February to the March 6 market low. This psychology left its trace in the market: (click to enlarge)

The precursor week ended a good looking rally in the mid and small caps that had been leading the market, and after October 6, the market was toast as we were on the edge of the precipice of systemic breakdown.

This same article also predicted an earthquake that did not happen, but they got the psychology/market part right to a tee. The web bots are now predicting a strong happening centered around the October 25, 26 time frame. I have seen this as being Israel striking Iran and also as a global banking and financial market crisis with a dollar collapse that runs from November '09 to November '10. After the detailed and correct bot prediction of last year, this gives me pause in continuing to be aggressively long anything but gold, silver, oil, and military holdings - and perhaps better than anything, cash. I am gradually collecting profits on my high beta climbers. Gold, oil, and some of the homeland security stocks are climbing as good or better than the rest of the market right now anyway. However, if we have a repeat of last October, this event could cause fund redemptions and a brief hit being dished out to gold along with everything else.

Given the other evidence I've posted on here about Israel, It looks like the bots could be seeing a war breaking out causing turmoil in the markets. As I pointed out in an earlier post, Middle East experts believe we should worry when the Israelis go really quiet with their attack talk, and they have as I charted in the post. I've noticed article after article with titles like "Israel dialing down tone" "Israel mum" etc. It would be wise to be defensive over the next 2 months or so. Doug Kass, who called the March bottom perfectly and was getting long a few weeks ahead of that bottom, began going short a few weeks ago and is now reportedly at his highest net short position since February.