Based on the charts of the S&P we are now seeing the formation of pattern that could lead to a dead cat bounce.
We are anticipating that the correction will reverse in the next few days and begin a recovery to the 1260 to 1270 area which happens to be the 200 day MA.
As the markets seem headline sensitive, the announcement of some kind to super Eurobond to bailout (delay & kick the can down the road) the worst of the EU debtors could be a trigger to a rally.
It is also our view that gold will substantially outperform the S&P in this next rally based on the following chart:
Note on the chart that the 20 day MA has just crossed the 50 day MA, a bullish development for gold.
While we have become bullish in the short term, the long term still looks bleak.
The Euro remains an unsustainable currency, and bank holidays and civil unrest are sure to follow during 2012.
We are anticipating that the correction will reverse in the next few days and begin a recovery to the 1260 to 1270 area which happens to be the 200 day MA.
As the markets seem headline sensitive, the announcement of some kind to super Eurobond to bailout (delay & kick the can down the road) the worst of the EU debtors could be a trigger to a rally.
It is also our view that gold will substantially outperform the S&P in this next rally based on the following chart:
Note on the chart that the 20 day MA has just crossed the 50 day MA, a bullish development for gold.
While we have become bullish in the short term, the long term still looks bleak.
The Euro remains an unsustainable currency, and bank holidays and civil unrest are sure to follow during 2012.
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