Which Way Wednesday

Another day, lots of news and a positive close for the US stock markets. So Cyprus parliament rejects the confiscation, oh I meant, tax on customer deposits and stocks have another reason to turn higher- all is well in the global financial system. I am not going to dwell on the negativity but I must take a jab or two at the lunacy of these markets and how they react.

Tomorrow we will be treated with the FED and its Open Market Committee, as I stated yesterday, the Fed now has an excuse now to continue buying its own bonds aka print money out of thin air. One would think it would be foolish of them to hint of anything less because that would mess up their precious manufactured STOCK MARKETS, now wouldn't it? If this Cyprus story does not open your eyes, I do not know what will. I do know that this is a story that will not go away- there is a whole lot more to come!

Enough about that and stocks, let us take a look at this

This is GOLD in a weekly perspective, please click on it and take a good, long, hard look. This is not a market that we need to fear is going to fall but one market that looks ready for its next leg higher. Can it drop, anything is possible but after watching the past couple of weeks and now with this new banking fiasco, one should feel confident that the bottom of 1554 may not be seen again for many years to come! The hedge fund crowd is leaning one way in this market and that is to the short side, I am with the group that says these guys are on the wrong end and this will cause a major move to the upside in GOLD in the not too distant future. The chart above tells the story itself, the base has been built for liftoff!

As for the currencies, I am not posting any charts, I will do that tomorrow. You all now that I love the CAD & Aussie but I have been cautious because of my assumptions for a stock market correction. Please notice how they both are holding their own the past few days even with the volatility in stocks. Remember, that Canada and Australia did not participate in the QE policy like the US, UK, Europe and Japan. If a story of this nature would have come out 3 years ago, these 2 currencies would have been down a couple of hundred points in 1 days time. That is not happening now because the stock markets are not crashing like they once would because the Central Banks are providing so much liquidity to these markets! How long can stocks keep from crashing? I do not know but I do know this cannot go on forever!

Please read the following link, I posted it this morning to my facebook page. I got this from Turd Ferguson and I think it does a great job of explaining what I have been writing about. I do think it is a very helpful read!
 http://www.chinadaily.com.cn/business/2013-03/14/content_16309283.htm

Good Night and let's see what the Fed brings on Wednesday.
Be Careful
Thanks
Martin