Dear Readers JAWS of our PRESSURE GAGES have closed. Is the grinding phase coming or will an invisible hand/power cause the JAWS wide open again. In many ways this decline is more powerful than the one started in Feb 2007. Now, the question is will it be followed with a devastating grind today? We will be watching. Probabilities are there. I do not want us to start celebrating the start of the decline. It does nobody good, but if it happens it will be because of the boom and bust constantly tailored into our life by politicians. So be it, just make sure my readers are not caught. Gold continued lower and currencies stalled after initial recovery. Just follow the scripts we outlined. Energy, well we think it turned ( with a caveat of new hostilities eruption in MEast). Interest Rates rose as projected, but may have reached the point of return and could be coming down. We think they may not come down immediately, which would hurt our $ forecast scenario. But Remember, if you do not want headaches then stay out of the $, as you know that it will go lower into the next year.
4 comments:
Hi Boris
It certainly appears as though energy stocks are correcting one full cycle behind GOLD. If this is true the analog would serve well as a probability, next 2-3 weeks.
Danno
Dear Danno, Could be you are correct, I may need more work to do on this phasing between the two, but One thing for sure. The GOLD/OIL ratio may have come down too much and will need to start going up again, towards 15 and higher eventually
Good Trading
Yes, I agree that a move down is in the offing, but as yet I doubt that is the beginning of the end, but rather the beginning of the last correction before the final rally coming this summer. Depending on how deep this correction is we may simply rally to a retrace of the highs of this past week. Mark my words, the Last Party will end this year, most likely between now and Autumn, and the aftermath will make the '00-'02 recession look like a picnic. I am not looking forward to it at all.
Dear Eduardo, welcome to our house. If you look at "August Again" graph, Which is the "Yellow Brick Road" we are following. It depicts exactly the scenario you describe with a rally back into OCT/NOV, but How strong that rally will be depends on how far $ dollar goes down. Cause we think that we are already close to the end of the "deflated SPX"
Good Trading
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