"Editor's note: World Of Wallstreet welcomes a contribution from Tobinator the most highly rec'ed poster on the IV precious metals board (click here)and editor of the free, quarterly Heavy Metal Investor newsletter (click here). My comment on this is "What a bearish looking set of charts. I should have gone short Friday before the close."
Good
Evening. I certainly understand bbb's frustration with this emerging,
grinding downturn we've been at the mercy of since early December.
That start corresponded to the US dollar's reversal. Today's
disappointment in the jobs (but not that much) sent the broad markets
down to where by mid-afternoon are reversal took hold and rallied the
index just into the green. The late day rally probably was fueled by
fat shorts taking profits and having a possible weekend rescue package
that could stoke markets. My feeling is the carefully crafted bull
rally from Mar - Dec 09 needed to not have the mid-afternoon sell off
take hold else have a technically damaging drop on Monday. On the
surface from a pure chart perspective, today's rally signals a reversal
though I need much more data before I am convinced. My gut tells me
that the rally may be more of those with an interest in keeping markets
up came in to support them and not that market sentiment suddenly
changed to the positive.
What was refreshing was the HUI is even though the Dow was at its
lows, the PM shares were barely down. It could be that shorts decided
to cover due to gold being in a real strong region of support. There
is also the element that if the ECB blinks and bails out the PIGS
(Portugal, Ireland, Greece, and Spain), the US dollar could fall
significantly fueling a gold rally.
We have a real interesting situation brewing in Europe. The ECB
is talking tough about the PIGS but there is a real risk of turning the
recent upset in an outright panic in the world markets. I think if
they bail them out, they will not do any real reform and consequently
find themselves in the same situation. The longer this thing festers
the worse it's going to become. Technically many markets are in
tenuous positions and vulnerable for deep retracements of last year's
gains. Ultimately, I think European politicians are as spineless as US
ones so a major bailout is probably going to occur soon.
Tobinator
Broad Market, Financial and Real Estate Indexes,
Dow - Short Term,
DJ Financials Index - Short Term,
S&P 500 - Short Term,
Select Commodities & US Dollar Index,
Gold - Short Term,
Gold - Medium Term,
HUI - Short Term,
HUI - Medium Term,
Natural Gas,
Oil - Short Term,
Platinum - Short Term,
Platinum - Medium Term,
Silver - Short Term,
Silver - Medium Term,
US Dollar - Short Term,
US Dollar - Medium Term,
http://stockcharts.com/h-sc/ui?s=$USD&p=W&yr=2&mn=2&dy=0&id=p80020589757&a=148768934&listNum=3
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