Best of the Week
Most Popular
1.Is the Stocks Bull Market Over? Dow Trend Forecast into End January 2015 - Nadeem_Walayat
2.Gold and Silver Stocks Apocalypse Now, Bear Market Review - Rambus_Chartology
3.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
4.Ebola Terror Threat Suicide Bio-Weapons Threatens Multiple 9/11's, Global Plague - Nadeem_Walayat
5.Second-Richest Man Says Mortgages Now a "No Brainer" - Dr. Steve Sjuggerud
6.Gold And Silver Still No End In Sight - Michael_Noonan
7.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
8.The Gold Bug is Set to Bite Back - EWI
9.How Alibaba Could Capitalize on the EBay-PayPal Split - Frank_Holmes
10.The Consequences of the Economic Peace - John_Mauldin
Last 5 days
Bullish Silver Stealth Buying - 24th Oct 14
Blood in the Streets to Create the Gold Stocks Investor Opportunity of the Decade - 24th Oct 14
Swiss ‘Yes’ and ‘No’ Gold Initiative Campaigns Compete at Launches in Bern - 24th Oct 14
War And The Law Of Unintended Consequences - 24th Oct 14
Tesco Meltdown Debt Default Risk Could Trigger a Financial Crisis in Early 2015 - 24th Oct 14
Saudi Move to Cut Oil Prices Is Now Russia's Biggest Economic Threat - 24th Oct 14
US Stock Market Top Is Now In Sight - 24th Oct 14
New Profit Points in the Shifting Balance of Power, Welcome to Saudi America - 24th Oct 14
QE Failure & Folly Of Paper Mache, Treasury Bond Integrated Lifeline Patches - 24th Oct 14
U.S. Economy Faltering Momentum, Debt and Asset Bubbles - 23rd Oct 14
Annuities - Afraid Your Money Will Vanish before You Do? - 23rd Oct 14
What Debt Deleveraging? - 23rd Oct 14
How to Profit from Massive Spin-Offs with Just One Play - 23rd Oct 14
Evaluating Ebola as a Biological Weapon - 23rd Oct 14
Euro, USD, Gold and Stocks According to Chartology - 23rd Oct 14
Why You Should Always Be Invested in the Stock Market (Even Now) - 23rd Oct 14
Five U.S. Housing Market Warning Signs Point to Real Estate Market Downturn - 23rd Oct 14
The Better Short: Gold or Silver? - 23rd Oct 14
Focus on Graphite Companies with Green Energy and Technology Strategies - 22nd Oct 14
Crude Oil Price Hitting Bottom - 22nd Oct 14
Evidence of Another Even More Sweeping U.S. Housing Market Bust Already Starting to Appear - 22nd Oct 14
Gold Or Crushing Paper Debt Stocks Crash? - 22nd Oct 14
India Gold Demand Surges 450% and Bank of Russia Demand At 15 Year High - 22nd Oct 14
Bitcoin Stock Exchange Could Be "More Valuable than Alibaba" - 22nd Oct 14
Currency War - How to Profit from a Stronger U.S. Dollar - 22nd Oct 14
Banks Hold Treasuries and Make Loans- 22nd Oct 14
Gold and Silver Timing is Everything - 22nd Oct 14
Don't Get Ruined by These 10 Popular Investment Myths (Part VII) - 22nd Oct 14
Follow the Baby Boom to Biotech Stock Profits - 22nd Oct 14
Copper, Nickel and Zinc Won't Be Cheap for Long - 22nd Oct 14
How Will We Know That the Gold & Silver Price Bottom Is In? - 21st Oct 14
Is Gold as Dead as Florida Hurricanes? - 21st Oct 14
First Swiss Gold Poll Shows Pro-Gold Side In Lead At 45% - 21st Oct 14
The Similarities Between Germany and China - 21st Oct 14
The REAL Reason Why the Stock Market Turned Down - 21st Oct 14
Petrobras is a 'Scheme, Not a Stock' - 21st Oct 14
Stocks Bear Market Indicator Is Off the Mark - 20th Oct 14
Stock Market Ideal Turning Point is at Hand - 20th Oct 14
Investors Quit Complaining, The Environment is Perfect Right Now - 20th Oct 14
Ebola Armageddon Could Trigger a Rebirth in Gold and Silver Prices - 20th Oct 14
Gold vs Euro Risk Due To Possible Return of Italian Lira - Drachmas, Escudos, Pesetas and Punts? - 20th Oct 14
Stocks Rebounded Following Recent Sell-Off, But Will It Last? - 20th Oct 14
U.S. Responsible for West Africa Ebola Outbreak Says Liberian Scientist - 20th Oct 14
Stock Market Intermediate B Wave has Started - 20th Oct 14
Gold Stocks Analysis – FNV, CG, NCM, SBM - 19th Oct 14
Stock Market Primary IV Wave Counter Trend Rally - 19th Oct 14
Gold And Silver - Financial World: House Of Cards Built On Sand - 18th Oct 14
Anatomy of a Stock Market Sell-Off - 18th Oct 14
Why OPEC Has Declared an Oil War on Russia - 18th Oct 14
Gold and Silver Extreme Shorting Peaks - 18th Oct 14
Bitcoin Price Fall to $350? - 18th Oct 14
Tesco Supermarket Crisis Worse To Come as Customers Vanish! - 18th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

Gold, Commodities, Stocks and Financial Markets Analysis

Stock-Markets / Financial Markets 2010 Feb 28, 2010 - 03:21 AM GMT

By: Douglas_V._Gnazzo

Stock-Markets

Diamond Rated - Best Financial Markets Analysis ArticleThe following excerpt is from the latest full-length market wrap report, available only at the Honest Money Gold & Silver Report website. All major markets are covered: stocks, bonds, currencies, and commodities, with the emphasis on the precious metals.

Economy

New home sales fell 7.6% in Dec., which equates to an annual sales rate of 342,000 units. This was the lowest number ever reported. Supply on the market rose to 8.1 months. Sales are down a large 22.9% for the year (see chart below).


Sales of previously owned homes declined 7.2% in January, which was a seven-month low. This works out to an annual rate of 5.05 million units - the second largest decline on record.

It will be tough for a sustainable recovery to last with numbers like these, especially considering that the unemployment rate remains so high. Capacity utilization is trying to carve out a bottom.

Further evidence of weak underlying economic currents is the chart of bank credit (below), which is contracting significantly. The Fed has put liquidity into the system, but the banks are not loaning it out.

Currencies

As I have said repeatedly for months - the dollar is calling the shots for stocks, commodities, and the precious metals. Due to Greece's debt debacle the euro has come under intense selling pressure, which put a strong bid under the dollar.

On Friday the euro gained versus the dollar due to reports that German officials are considering buying Greek bonds through state-owned lender KfW Group.

Initial reports say that Greece may receive up to 25 billion euros ($34 billion) in aid. We'll see how this develops and plays out and whether the market likes what it hears or not.

As the dollar chart below shows, momentum is waning. MACD has put in a negative crossover and the histograms have turned negative as well. RSI has turned down.

Notice how long MACD has been essentially moving sideways: the dollar has been overbought, but has remained so because of the euro's weakness. If the euro rallies, the dollar will fall. If this occurs, it will put a bid under stocks, commodities, and especially the precious metals.

Next up is the daily euro chart. On Friday the euro finally rallied, with MACD making a positive crossover. The histograms have moved into positive territory and RSI is headed up.

It remains to be seen if this is more than a dead cat bounce. A lot will depend on any news out of the EU regarding Greece; and how the markets respond to the news.

Overhead resistance is indicated on the chart by the 38% Fibonacci retracement level. If the euro continues to rally, it will be supportive of gold and the other commodities.

Commodities

With the recent dollar weakness, commodities also had a bid put under them, as the chart of DBC shows. Friday's candlestick was a bullish white Marubozu, where the open was the low of the day and the close was the high for the day: meaning the bulls controlled the ball all day - from open to close. A possible 13/34 crossover may be setting up; it will depend on the dollar and the euro.

Gold

Gold has been holding up quite well, considering the strength of the dollar, and the weakness in the euro, as the chart below shows. Notice that the euro has fallen below last summer's low, while gold has remained well above the Nov. low, and is presently putting in the highest reaction low since making its all-time high.

The daily chart (below) shows gold breaking out above its falling wedge formation and then reversing and testing the breakout level, which so far has held. Now gold is moving back up, testing overhead resistance.

A break above resistance near 111 could lead to a run at Jan.'s high at the top of wave "B", and perhaps a challenge of the all-time high at the top of wave "A".

STO had been in overbought territory above 80, and it then fell below 80, indicating that a correction was unfolding. However, with the end of the week rally, STO has turned back up, hinting that the move up may have legs.

Notice, however, that it will not take much to put gold back above 80 (STO) and into overbought territory again.

This potential set-up has important implications if it plays out. The full market wrap report covers this possible scenario in detail, as well as several others.

In today's turbulent times of financial crisis gold and silver are more important than ever. The precious metals and other markets are at crucial inflection points. Which way the dollar and the euro go will have a major impact on all markets.

If you would like to read a weekly comprehensive report that covers all these issues and more, including nearly 40 charts per issue, we invite you to try a three month trial subscription for only $69.00. Free trial subscriptions are no longer available.

Our stock watch list provides numerous investment ideas each week and the model portfolio offers a game plan to implement them. Stop by and check it out. There is no obligation to continue your subscription and the free book and other materials are yours to keep.

Good luck. Good trading. Good health, and that’s a wrap.

Come visit our website: Honest Money Gold & Silver Report
New Audio-Book Now Available - Honest Money  

Douglas V. Gnazzo
Honest Money Gold & Silver Report

About the author: Douglas V. Gnazzo writes for numerous websites and his work appears both here and abroad. Mr. Gnazzo is a listed scholar for the Foundation for the Advancement of Monetary Education (FAME).

Disclaimer: The contents of this article represent the opinions of Douglas V. Gnazzo. Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Douglas V. Gnazzo is not a registered investment advisor. Information and analysis above are derived from sources and using methods believed to be reliable, but Douglas. V. Gnazzo cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions. This article may contain information that is confidential and/or protected by law. The purpose of this article is intended to be used as an educational discussion of the issues involved. Douglas V. Gnazzo is not a lawyer or a legal scholar. Information and analysis derived from the quoted sources are believed to be reliable and are offered in good faith. Only a highly trained and certified and registered legal professional should be regarded as an authority on the issues involved; and all those seeking such an authoritative opinion should do their own due diligence and seek out the advice of a legal professional. Lastly Douglas V. Gnazzo believes that The United States of America is the greatest country on Earth, but that it can yet become greater. This article is written to help facilitate that greater becoming. God Bless America.

Douglas V. Gnazzo © 2009 All Rights Reserved


© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014