Tuesday, June 29, 2010

Yield Curve Flattening - Bear Market looming

yield Curve Flattening has straight Bearish market implications.
It usually points to impending economic contraction and deflationary pressure - simply said Quantitative Easing 2.0 is coming.

Saturday, June 19, 2010

GOLD: 'Trend Is Your Friend'

Moving nicely inside the Up-Trend channel.
Note that the Commercials' and the Large Speculators' positions has been perfectly aligned for this trend continuation to run smoothly since the Lows in early 2004. It is important to note that Commercials are actually increasing their hedging short positions and close to the size when they first probed the 1248 High in late 2009. A basic view would be that they try to lock in as much volume at the present price levels as they are able to.

Interesting fact is that according to The World Gold Council the largest Gold Reserves holder is the US with 8 133 tonnes which represents 70.4% of its reserves.

This chart reminds every trend has an end where it bends. No way I would call it as we never know where a trend might end up especially as I wouldn't rule out a squeeze and a blow off top phase once the 1260 level is decisively taken out. Both RSI and Momentum show strength in the trend now and MAs are confirming the strong inertia the move has gathered. That's why as Physics laws rule we shouldn't go in the way of a body that has gathered such power along its motion course.
Now I mentioned the END as this Rising Wedge I have drawn is just an assumption and should be monitored for confirmation as it has strong Bearish implications. However I would look for a blow-off top first.

Wednesday, June 16, 2010

Tuesday, June 15, 2010

S&P500 struggling above its 21-DMA

Momentum is going on but shows signs of topping. Same goes for RSI struggling ahead of the 50 level.
Monday close was a Shooting Star formation which definitely Bearish for stocks...

Gold, Crude Oil & Copper trend update

Crude is developing inside a Bearish Rising Wedge and the 200-DMA caps the ascent at $77.
Rate Of Change is showing the Momentum is topping.

Gold is either gathering strength to breakout to new High or to drop as a stone as it is the only commodity still in rising trend. Trend lines are still keeping is bid however the pivotal short term 21-DMA is turning flat.
RSI and Momentum are waning in accordance to the failure to take out the 1250 level twice.

Copper is going down in the trend channel and momentum and RSI are confirming the price action. The industrial metal down trend is signalling bad for the economy and the emerging markets overheating.

Sunday, June 13, 2010

S&P500 developing inside a Bullish Falling Wedge - 1107 is 'make or break' level

S&P is telling a possible reversal story but not confirmed until the 1107 Resistance is taken.
The Expanding Triangle was tested first on May 6 - 'The Flash Crash' and now stocks are trading below the confluence of Resistance levels at 1107: The 200-Day MA, The horizontal level where the last up-move was capped and the broken Support T/L of the previous Expanding Wedge.

One important note is the Rate Of Change had broken to the upside and the ADX is signalling the trend strength has abated with possible Bullish cross confirmation. Same goes for the RSI which is still lingering below the 50 level so a rejection off the 1107 would be a massive short signal.

Sunday, June 6, 2010


"The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again."

A Tract on Monetary Reform (1923)

In truth, the gold standard is already a barbarous relic.
Monetary Reform (1924), p. 172