Friday, April 26, 2013

TWINS?

Good day to all, I was going to write last night but I was just exhausted and in need of sleep. It is shortly after 6 AM and I am glad to be writing now before the 1stQ GDP is released. It just was not the stock market this week to put on a show, actually the stock market has moved sideways while Oil, Gold and Copper have exploded higher. In general it has been a decent week across the commodity sector. Excited? Me, no not really and here is why- commodities have been going down for quite some time and in my opinion that is because the economy is not growing at the rate it is believed to be. The demand for oil, copper, grains and meats simply is not there!

Earlier this week I thought it was inevitable that the stock indices would move higher and at least touch important milestones, 15000 Dow and 1600 S&P500. That did not come close as both indices did not even hit their recent highs. I expected the markets to go up into this GDP release today as they are expecting a number of 3%, of which I believe the markets will be disappointed. If the number comes out less than expected, we will have the usual spin and tell us how great the next few quarters will be, same old-same old.

The title of this post is TWINS, I am referring to what appears to be short term tops in the US dollar and the US Stock markets. Have a look at the daily charts below of the Dollar and Dow. Very simple, in my opinion, the GDP hits them with a surprise to the downside and the dollar gets crushed, mainly against the Euro, Pound and Yen.

This week has been decent for the CAD and Aussie, however I am afraid that if the SLOWING GLOBAL GROWTH story picks up steam today, they may give up the gains from the past couple of days. The gains from oil and copper this week could also be given back in quick fashion as those gains were most likely the result of short covering! Can the GDP come in better than expected? Like I have said many times before, nothing surprises me anymore when it comes to these rigged markets!
Be Careful out there, especially today to end the week. Sorry not to talk much on Gold but I have focused on these key areas this week and it has been alot less stressful. I do not think Gold and Silver are going to make V-shaped bottoms and make a run for new all-time highs, I think they both need time to heal. I could be dead wrong or we could have another 2 years of consolidation, I guess we will just have to wait and see.

As for the stock market-we just have to see if the INVISIBLE HAND is needed to work some magic!

Have a great weekend, thanks for reading!
Martin

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