Best of the Week
Most Popular
1.SNP Offers Labour Deadly Death Embrace Alliance, Holding England to Ransom, Destroy UK From Within - Nadeem_Walayat
2.Gold And Silver – Most Widely Used Currency In Western World? Stupidity - Michael_Noonan
3.Election Forecast 2015 - Coalition Economic Recovery vs Labour Collapse - Nadeem_Walayat
4.Election Forecast 2015 - Debates Boost Labour Into Opinion Polls Seats Lead - Nadeem_Walayat
5.Why are Interest Rates So Low? Ben Bernanke, Confused as Ever, Starts His Own Blog to Prove It - Mike_Shedlock
6.Leaders Debate Election 2015 - Natalie Bennett Green Party Convincing Anti-Austerity More Debt Argument - Nadeem_Walayat
7.Labour Economic Collapse vs Coalition Recovery - UK Election Forecast 2015 - Video - Nadeem_Walayat
8.China’s Stock Market Mania; How High can Red-chips Fly? - Gary_Dorsch
9.Gold and Misery, Strange Bedfellows - 31st Mar 15 - Dan_Norcini
10.Ed Miliband Debate Election 2015 Analysis - Labour Spending, Debt and Economic Collapse - Nadeem_Walayat
Last 5 days
Gold & Silver Alert: Silver Stocks’ Signal - 20th Apr 15
Now is the Time to Buy Resource Stocks, Especially Gold Equities - 20th Apr 15
DJ Transportation & Utility Averages Suggest Stocks Bull Market Is Over - 20th Apr 15
Crude Oil Price Bull Market Hope - 20th Apr 15
Stock Market Bears Get Slaughtered Despite Greece Counting Down to Grexit Financial Armageddon - 20th Apr 15
The Rise of the Paper Machines - 20th Apr 15
Gold and Silver Inflection Point - 20th Apr 15
SP500: A Butcher's Stock Market (Chop Chop Chop) - 20th Apr 15
Are Stock Market Bears Slowly Gaining Control? - 20th Apr 15
Sugar Commodity Price Bear Rally - 19th Apr 15
Avoid the Spread of the Stock Market "China Syndrome" - 19th Apr 15
Stock Market Going Nowhere Fast - 19th Apr 15
An Easy Way to Profit From the Two Biggest Trends in the Stock Market - 19th Apr 15
No Scripture Is Divine, Authentic and Beyond the Creation of the Human Brain - 19th Apr 15
Inflation, Central Banks, and Business Cycles - 18th Apr 15
Stock Market Correction May be Nearing End - 18th Apr 15
UK Housing Crisis, Immigration, Population Growth, Election Forecast 2015 - Video - 18th Apr 15
Q1 Corporate Earnings Risky for Stocks - 17th Apr 15
US Stock Market Getting Scarier by the Day - 17th Apr 15
Stock Market Watershed Day - 17th Apr 15
Gold Price Has “Hallmarks Of Market That Is Bottoming” - 17th Apr 15
Chinese Stock Market - Men Go Mad in Herds - 17th Apr 15
Two Stocks Offering Investors High Yields and Profits - 17th Apr 15
Gold Price Has “Hallmarks Of Market That Is Bottoming” - 17th Apr 15
Chinese Stock Market - Men Go Mad in Herds - 17th Apr 15
Two Stocks Offering Investors High Yields and Profits - 17th Apr 15
King Dollar Hurting Stock Market Corporate Earnings! - 17th Apr 15
Production Declines Hide Bigger Crude Oil Storage Issues - 17th Apr 15
Top Three Takeaways From Today’s OPEC Crude Oil Report… and How You Can Profit - 17th Apr 15
How to Profit from Australia's Healthiest Biotech Stocks - 17th Apr 15
What Is Really Driving Gold Price? - 17th Apr 15
Will Ever More Boomers Selling Retirement Assets Change Investment Prices For Decades? - 16th Apr 15
Won't Be Contagion with 'Grexit' Greece Euro-zone Exit - 16th Apr 15
Sharp Decline in USD/CAD and Its Consequences - 16th Apr 15
Blackstone is like Apple, Google, Hermes, Boeing - 16th Apr 15
The Most Dangerous Financial Headline I've Seen Since the 2008 Crisis - 16th Apr 15
Is Legal Tax Avoidance Extinct in the UK? - 16th Apr 15
Why Russia Will Send More Troops to Central Asia - 16th Apr 15
More Thoughts on the Current Crude Oil Market - 16th Apr 15
U.S. Treasury Secretary Warns Greek Exit Will Cause Enormous Disruption and Hardship - 16th Apr 15
The Hottest New Place to Find Stock Dividend Income in Q2/2015 - 15th Apr 15
How to Escape the Pensions Squeeze - 15th Apr 15
Water Crisis Game Changing Water Revolution - 15th Apr 15
The Drying of California - Corporate Farms Control of Water - 15th Apr 15
OPEC Going Broke, Dumping U.S. Dollars. Is That Good Or Bad? - 15th Apr 15
OPEC Just Confirmed It’s Losing the Oil War - 15th Apr 15
Four Uranium Companies Poised to Profit from the Growth of Nuclear Power - 15th Apr 15
Stock Investing Tread Softly… and Carry a Big Risk-Management Calculator - 15th Apr 15
Crude Oil Price Technical Outlook - 15th Apr 15
Important Bitcoin Price Action - 15th Apr 15
UK House Prices, Immigration, Population Growth and Election Forecast 2015 - 15th Apr 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

US Historic Bubble

The Dollar Nears it's Cyclical Ides of March

Stock-Markets / Financial Markets 2010 Mar 02, 2010 - 05:28 AM GMT

By: Bob_Clark

Stock-Markets Best Financial Markets Analysis ArticleThe indexes closed near the high of their monthly range. The S&P and the Nasdaq have been out performing the Dow.  
The transports were very strong Friday making new highs for the recent rally.  The long term interest rates fell hitting levels last see two months ago, as bond prices also closed near monthly highs.  You know a rising tide is lifting all boats when bonds rally, indicating a slowing economy and transports rally suggesting more products being moved and sold.  Clearly the market smells a change in money flow.


Even the dollar closed at it's highs, this must be hurting the Chinese exports to Europe etc. after they benefited so strongly from their yuan/dollar peg during the dollar weakness.  At a time when countries around the world want lower currency values so they can export their way out of debt, it is clear the upward revaluing of the dollar is an impediment.

The metals fought their way back up to close with small gains or losses for the month and near the top of their ranges as well.  The bullish sentiment is coming back into some of the gauges such as the investor's intelligence.
 
It goes to show, if you throw enough money at something, it will increase in value.  Correlation still rules.
 
I received an Email from a reader which made me realize that because I am skilled at calling the market and because these Emails are sent everyday the focus can narrow down somewhat. Exacerbating this, is the fact that we have been going sideways since October in many markets. The purpose of the advisory is to help people reduce risk and stay with the bigger trends.  So if you are a "buy and hold investor" keep in mind that when I make short term calls, that it may not be applicable to your investment planning and strategy.
 
US$...below I have inserted a chart of the dollar going back 20 years.  In it I have inserted  the 3 year cycle which you see is very consistent.  Notice that the next year plus time zone in the 3 year cycle has not been kind to the dollar over the last 20 years.  It is possible that the pattern has changed and  we have started a major up trend in the dollar that will cause the 3 year pattern to fail or give a late translation but we can't bet on it yet.  If the normal pattern is still in force then it has bullish ramifications for stocks and the metals over the next year. It is still too early to call a top in this rally but keep this chart in mind.92
 

SPY...notice we really have not done much in the last 4-5 months. It has been a traders market lately and buy and holders are getting frustrated.  I think this is a rest stop more than a turning point.  Remember we are approaching the one year anniversary of the march low and the stock market may give us a dip in the early March time frame to acknowledge it.  It would be nice to see the bullish sentiment back off one more time, it is the only thing making me nervous  right now.  If we are going to get a c leg down in this correction we need to do it soon.  I am trading both sides of the market as we try to get traction.
 


 
XIU...no chart...The xiu is is being buoyed by the commodities and the U.S. stock indexes.  It seems to have made a good low but it too could be influenced by the psychology of a  March low as well. 


 
 
GLD...if we are going to go up in gold we need to to see some convincing buying over the next week. A  wave C down in the stock indexes will put a damper on this rally but for now I am bullish because of the seasonals and the chart.  Buy dips as long as last weeks low is intact, and when I say buy the dips I am not recommending short term trades, sit tight and see what happens. We should see 117 but use a stop loss.


 

 


 
 SLV...remains in a bullish mode as well, what I said about gld applies here but because of the commercial positions as show in the latest Commitment of traders report (posted on my blog), I favor slv over gld.  Again, buy dips as long as last weeks low holds. Look for 18 if it does.
We have moved our stop up to 14.90 on original positions bought at 14.45 which is a long term trade
 
 

 


 
GDX...because markets are so correlated, gold stocks will be at risk of a March c wave in the general indexes, just as the metals are but seasonal factors remain positive for a while.  A failure now would call the bigger cycles in the metals into question.  The juniors I follow are lagging which is a worry.
 
 TLT...I put in a chart of the yield ($TYX) tonight instead of the bonds themselves to show how rates have dropped.  Rates need to keep falling to help our cause on the metals.  The markets seem to be smelling a fresh round of quantitative easing not yet visible. 
 
 
   
Like the dollar chart above we are fast approaching the time when the metals and their stocks turn and make seasonal yearly lows.  We must remain aware of the possibility that we fail in an attempt to breach recent highs and defend against a sell off with well placed stop loss protection.  The same logic applies to the markets in general.  The fed for some reason has been letting the M2 money supply shrink and if this continues it will be hard to press all markets higher.

This week should either see a high water mark for price or we pop.  Beware the ides of March or at least be aware of it.

Bob Clark is a professional trader with over twenty years experience, he also provides real time online trading instruction, publishes a daily email trading advisory and maintains a web blog at www.winningtradingtactics.blogspot.com  his email is linesbot@gmail.com.

© 2010 Copyright Bob Clark - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2015 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