Sunday, June 2, 2013

Not So Promising

What a way this past week ended. I almost put my foot in my mouth with one prediction on Friday, that was the US Dollar was most definitely not going to close the month above 84. That did not happen but it did try to make a push as all the other markets unraveled. Could you believe that the Dow Jones actually closed down over 200 points? I must admit that even I was surprised with that action. I promised to bring some charts this weekend and I would have done just currencies but I felt compelled to show a few other key markets as these charts have caught my eye. Let's take a look at OIL
All the charts are of the daily time frame, look at how Oil finished the week. Please notice how it appears Oil has found the top of its trading range between the $95-96 mark. It ended the month with a 91 handle and does not look like it has much upside going forward. Next I want to show Copper
To start the month of May copper looked as if it was going to break below $3  and then it had a huge short covering rally above 340, however, notice how it had no follow through. I am not a copper trader but I will say this, I would not be surprised at all if Copper breaks below $3 in the coming months as the summer moves along.

I am not showing charts of the US stock markets today but I will point out that this could be a very long summer for the stock markets. If oil and copper continue to work lower, it should be of great warning that the economy is not as strong as you are led to believe by the ever rising stock markets. I really do believe that this game the US Fed is playing with all of the markets will at some point blow up in their face and it will prove costly to those you do not see through all the BS. Has anyone been taking notice what has been happening in Japan, could Japan be the start of Global Equities coming out of FANTASY LAND, where the belief is- as long as the government officials continue to print money, all is well in the world? You have been warned here and I will continue to warn, I can only hope that you take me seriously and share this blog with as many people you possibly can!

Let's finish this up with the US dollar and Gold.
First Gold
Am I disappointed with the price action on Friday, sure I am but if things with the equity markets continue to unravel and the Global economy comes into question, I feel that Gold will benefit and start moving to the upside. Yes, Gold has been beaten and frowned upon for just about 2 years now and especially for the start of this year. The only way this will continue to be the case is the fact that the US stock market is believed to be the place to be for yield on your money and GOLD is useless. At some point this will change and who knows, we may be on the front doorstep to this SOONER than the majority may want to believe!

Next and lastly I will post 2 charts, one of the Dollar and one of the Euro. I stick to my opinion, the dollar is crap and I see no reason for one to want it as your currency of choice. I really do believe the rally in the BUCK has run its course.
I will stick with my view that the Euro is headed for 135+ some time this summer!
Long term support has been tested and it appears we have formed a nice double bottom near the 128 level. With all that being said and shown today, the new month trading starts tomorrow and I know that anything is possible, this may be a summer to remember or it can be a very boring summer where the markets just chop up everyone in sight and trade in some very wide ranges. All we can do is keep watching and waiting to see how it all unfolds.

Enjoy the rest of your weekend!
Martin





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