Are you ready for the great plunge?
Consider the following story from Reuters and these indicators:
Copper
WTIC death cross formation in process
XLF - without financials participating, there is no recovery
SOX formation in process and one of the better leading economic indicators
10 year T bills
CRB forming
SSEC - Shanghai death cross
Consider the following story from Reuters and these indicators:
MOHAMED EL-ERIAN, CO-CHIEF INVESTMENT OFFICER AT PACIFIC INVESTMENT MANAGEMENT CO., NEWPORT BEACH, CALIF.:
"Every aspect of this disappointing report points to the U.S. facing an unemployment crisis."
DAVID SEMMENS, U.S. ECONOMIST, STANDARD CHARTERED, NEW YORK:
"It's a terrible number, there is no good news you can glean from it. It's driven unemployment up and the participation rate has gone down. It shows the labor market is still lagging improvements in the overall economy. I don't think this puts pressure on the Fed to do more, though. It's a concern, but you there's still some job creation and you're really seeing softness in the economy rather than an outright contraction. I think this shows that the outlook for business remains uncertain, but the pickup in ISM suggests things are improving. I don't think it will affect the deficit reduction debate either. Any spending cuts will be aimed at 2013."
Copper
WTIC death cross formation in process
XLF - without financials participating, there is no recovery
SOX formation in process and one of the better leading economic indicators
10 year T bills
CRB forming
SSEC - Shanghai death cross
I have posted all Euro Bond chart in picture format so you can just scrolls through them.
ReplyDeleteCheck it out
http://oahutrading.blogspot.com/2011/07/euro-bond-yields-going-up.html
Gold: If I remember right, gold took a fairly solid blow in 2008, losing over 20%, shooting down with all the other commodities before it was able to recover for another spectacular run. I noticed you suggest gold in this article. Do you have any suggestions for why Gold would not take, say a 15% dive this time, thus providing another buying opportunity to wait a bit for.
ReplyDeleteThank you Thinmint for your insightful comment.
ReplyDeleteAs you noted, gold did take a substantial hit in 2008.
The question is whether history will repeat itself?
My suspicion is that gold will hold up remarkably well during the next round of liquidation sell off. Perhaps it will pull back 5 or even 10%, but beyond that amount, I would be surprised.
Why?
Because the market has a memory.
It will be a case of "fool me once, shame on you; fool me twice, shame on me".
It is my view that market participants are waking up to the monetary value of gold rather than viewing it purely as a commodity.