We'v been waiting a few weeks now to see the stock market peaking. It seems as if the turn has finally come and that the bulls are finally running out of charge. There are numerous signals supporting a down turn in the market is pending now.
As of yesterday the 30 yr T bill chart shows an Evening star or bearish candle pattern at resistance. The dollar has also made an opposite bullish candle pattern or Morning star suggesting that it is going to go stronger the short term. This should put some pressure on commodity demand therefore resource based stocks and emerging markets. Watch the Shanghai.
The Dow Jones Industrial and the S&P 500 also look very top heavy at their respective resistance levels. They have also reached 161% fib extension levels and now sit testing their respective 10ema or 20ema support moving averages. This is dangerous territory if you are a bull or if you are expecting the market to go higher yet.
Our local stock market is also peaking displaying shooting stars at resistance levels. Not to say that this is the beginning of the double dip recession. We are not of the belief that a double dip recession will take place. However, we are due for a wave four count in our current macro wave cycle. A wave four count is a negative move which does go below the lowest point of the previous low. This would be around 9800 on the Dow Jones.
Trade well; not often.
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Stock Market Investment Workshops, ebooks & financial freedom @ http://www.wealthskills.co.za Visit Forex Fund Management for consistent returns by a Forex Pro looking after your money while it works for you.
Wednesday, October 20, 2010
Thursday, October 7, 2010
Gold surges with dollar weakness
We have been talking Gold up for over 18 months now. As the dollar goes weaker the gold price is correlated to it and so Gold prices must go higher. In addition to the dollar weakness, asset fund flow movement is easing out of cash and into precious metals like Gold and platinum resulting in the massive surge of prices for the commodities.
This does not mean that traders and investors should invest in the stocks relative to these precious metals. Traditionally, gold stocks dont follow the gold price. Platinum stocks tend to have a better correlation to their underlying metal's spot price. But it too should not be banked at present.
The best is to buy gold and Platinum spot price positions. That means you buy the actual price in dollar terms of an ounce of gold or platinum itself. It has nothing to do with a mine or a stock. You are speculating on the demand and supply of the commodity and either selling the precious metal or buying it accordingly.
With one of the major South African gold miners cancelling their hedge recently reasoning that the gold price is not expected to go below $1300 again it gives you a warm fuzzy feeling about the way gold spot price is going to go!
Our long time take profit level for Gold spot price was $1350 using a weekly chart for a medium term hold position... As it happens we hit this level in the gold price in October.
The dollar is at support now of the 161% extension against the EURO so caution is to be taken now in any long position. Move your stop loss into profit and keep an eye on it.
Trade well; not often.
-----------------------------------------------------------------------------------------------------------
Stock Market Investment Workshops, ebooks & financial freedom @ http://www.newsweek.co.za Visit Forex Fund Management for consistent returns by a Forex Pro looking after your money while it works for you.
This does not mean that traders and investors should invest in the stocks relative to these precious metals. Traditionally, gold stocks dont follow the gold price. Platinum stocks tend to have a better correlation to their underlying metal's spot price. But it too should not be banked at present.
The best is to buy gold and Platinum spot price positions. That means you buy the actual price in dollar terms of an ounce of gold or platinum itself. It has nothing to do with a mine or a stock. You are speculating on the demand and supply of the commodity and either selling the precious metal or buying it accordingly.
With one of the major South African gold miners cancelling their hedge recently reasoning that the gold price is not expected to go below $1300 again it gives you a warm fuzzy feeling about the way gold spot price is going to go!
Our long time take profit level for Gold spot price was $1350 using a weekly chart for a medium term hold position... As it happens we hit this level in the gold price in October.
The dollar is at support now of the 161% extension against the EURO so caution is to be taken now in any long position. Move your stop loss into profit and keep an eye on it.
Trade well; not often.
-----------------------------------------------------------------------------------------------------------
Stock Market Investment Workshops, ebooks & financial freedom @ http://www.newsweek.co.za Visit Forex Fund Management for consistent returns by a Forex Pro looking after your money while it works for you.
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