There are so many facts that clearly validate that Gold should continue to rise and the dollar should sink into the dust. However, the worst news for now has been priced into the dollar and when too many people start to take an extreme view, a turnaround is usually close at hand. Given the fact that the Dollar has mounted an impressive rally in the last few weeks and that there are so many large discrepancies surrounding Gold's surge to new highs, caution is warranted.
The correction in Gold will only gather steam if a weekly sell signal is generated. So far, it has generated a daily sells signal and if a weekly sell signal is not generated then Gold will most likely trade no lower than 990.
Let's see what happens on the weekly charts on Gold after this week.
Tuesday, January 26, 2010
Interesting
Credit or blame who you will. The Senate Banking Committee, which seems more interested in holding a hearing with Paul Volcker over President Obama's banking proposals than the full body does in holding a vote to confirm the current chairman of the Federal Reserve. Elliott Wave Theorist Bob Prechter, who caused bulls' skin to crawl and stomachs to flip in a late afternoon CNBC interview, where he insisted that the next wave down for stocks is now underway. Small investors, who refuse to help hedge funds and others keep stocks propped up, and remain AWOL from this waning cyclical rally.
No matter your choice(s) of villain, the fact that the stock market has not meaningfully rallied from last week's beating is ominous. Today specifically, the Dow's nearly 100-point gain from early in the day was suspect from the start, accompanied as it was with little volume. The few bulls steadfastly keeping their fingers in the dyke did their best to rally stocks a few times after the early day push higher wavered. But by the time Prechter was interviewed by CNBC's Sue Herrera, the Dow's gain was whittled down to less than 30 points, and most other indices had already turned lower.
Adding to the technical damage of the lousy volume and breadth was that the markets' late day flagging gave us outside days with virtually all of the major indices. This means that today's highs were higher than yesterday's highest level, and today's lowest levels were lower than yesterday's lowest point. More often than not, the near-term bias is in favor of the close; which today was down, albeit slightly. Now, we found out the hard way a couple times last fall that an outside day down doesn't always translate into the continuation of a downtrend, if there are enough other forces to keep things rising. But the markets' overall mood has changed, as I said the other day.
One thing not mentioned prominently as the market frittered away the rest of its rally is the most common-sense reason for it having done so: few want to be "long" when the next few days could still bring political shocks to Wall Street. Even if I was a bull right now, I'd at least want to have one foot by the exit door in advance of tomorrow's House hearing where God-knows-what other shoe(s) may drop over the whole A.I.G. thing. Who knows whether one Ben Bernanke's name might come up? Undecided senators don't know; that's one reason they are publicly undecided. Apart from those 30 or so members of the Senate who have publicly said they'll vote for Helicopter Ben (and have thus revealed themselves as the central banking system's most reliable whores) most of the rest at least have enough sense to wait until after the House hearing.
No matter your choice(s) of villain, the fact that the stock market has not meaningfully rallied from last week's beating is ominous. Today specifically, the Dow's nearly 100-point gain from early in the day was suspect from the start, accompanied as it was with little volume. The few bulls steadfastly keeping their fingers in the dyke did their best to rally stocks a few times after the early day push higher wavered. But by the time Prechter was interviewed by CNBC's Sue Herrera, the Dow's gain was whittled down to less than 30 points, and most other indices had already turned lower.
Adding to the technical damage of the lousy volume and breadth was that the markets' late day flagging gave us outside days with virtually all of the major indices. This means that today's highs were higher than yesterday's highest level, and today's lowest levels were lower than yesterday's lowest point. More often than not, the near-term bias is in favor of the close; which today was down, albeit slightly. Now, we found out the hard way a couple times last fall that an outside day down doesn't always translate into the continuation of a downtrend, if there are enough other forces to keep things rising. But the markets' overall mood has changed, as I said the other day.
One thing not mentioned prominently as the market frittered away the rest of its rally is the most common-sense reason for it having done so: few want to be "long" when the next few days could still bring political shocks to Wall Street. Even if I was a bull right now, I'd at least want to have one foot by the exit door in advance of tomorrow's House hearing where God-knows-what other shoe(s) may drop over the whole A.I.G. thing. Who knows whether one Ben Bernanke's name might come up? Undecided senators don't know; that's one reason they are publicly undecided. Apart from those 30 or so members of the Senate who have publicly said they'll vote for Helicopter Ben (and have thus revealed themselves as the central banking system's most reliable whores) most of the rest at least have enough sense to wait until after the House hearing.
FOMC
Remember FOMC announcement tomorrow- More than likely that's why the markets are doing nothing. More than likely no action till after announcement tomorrow.
Booooooooorrrrrrrrriiiiiiiinnnng!!!!!!!!!!!!!!!
Booooooooorrrrrrrrriiiiiiiinnnng!!!!!!!!!!!!!!!
1081 Overnight
We traded down to 1081 overnight but that number doesn't come up anywhere in my analysis, maybe I am off or if I am not 1076 is the next number below.
Anyone remember 1054 that was the magic number going up when I said we could have about 100 point left and surprisingly we stopped @ 1150.
Lets see what happens today.
Anyone remember 1054 that was the magic number going up when I said we could have about 100 point left and surprisingly we stopped @ 1150.
Lets see what happens today.
Pause day
Monday confirmed our pause day in the market as was expecting from the massive expansion last week. Today we look like we will start weaker even with the blow out earnings from AAPL. A note on AAPL they changed how they account for revenue so maybe this is not a great blow out as they are making it seem.
Subscribe to:
Posts (Atom)
