Tuesday, August 31, 2010


Note: click on any chart to enlarge

DOW Chart looks bearish with a falling MACD (bottom of the chart), but it is a bit oversold right now and has a rising Full STO (top of the chart). I anticipate we'll see a bounce back to the 50 day moving average (MA 50 - blue line) before the next MAJOR downleg - a decline that is already baked into the cake.

(Note for the record: I believe the DOW will take out the Mar 09 low of 6,400 before this "Economic Depression" is over - and it may ultimately fall much more than that - Sub 1K DOW)

S&P 500 chart is nearly identical to the DOW chart above - a small bounce up to the 50 day MA is more likely than a large drop from here

Gold is looking quite strong with a bullish (rising) MACD, though a bit overbought for the time being. That's not to say we can't reach a new all-time high from here (it is possible), but a short-term pullback (falling Full STO) can be expected at anytime

Silver Chart is very similar to gold, with a rising MACD, but the Full STO illustrates a slightly less overbought condition. Note: Many folks are calling for A MASSIVE price surge once $21 is decisively broken. Some are even targeting $27-30 within months... Silver could become interesting soon.

Dollar... Hmm. Could go either way from here. The US Dollar index has been hugging its 50 Day MA for a while now and the MACD, though rising, looks like it may be starting to turn downward (note the downward sloping black line). A very tough one to call for the short term, but I have no doubt where it's headed over the longer term.

So where is it headed for the longer term you ask? Well, let me put it this way: No country in the history of the world has ever been successful in printing their way to prosperity - and the US will be no different.

Bottom line: The US dollar index is going to ZERO over the longer term




Willy2 said...

Silver and gold are going to get hammered, again. Like it was in the 2nd half of 2008.

Put up a chart of the $USB, $UST, $TNX, and $TYX. These are much more interesting that the S&P 500 and the Dow Jones.

Willy2 said...

The USD will go up in the coming 8 to 12 weeks ! After that, it remains to be seen but until then USD up !

My target: Currently the EUR/USD rate is at about 1.27 and that could go down to 0.80 or 0.70 in the upcoming weeks. That's a USD-Index of about 120, 130.

BxCapricorn said...

8:30 am West Coast time. Silver just peaked and I'm buying ZSL under $27.80. For you silver longs, you may want to sell and buy back in a week or so. Just saying. Market rally has also hit resistance, but I bought the market under 10K and I'm cashing out at the close. Boo-yah.

This is a trader's market, so if you're one way, whether it's short or long...you're missing out.

Anonymous said...

"Silver and gold are going to get hammered, again. Like it was in the 2nd half of 2008."

I would not be so sure of this! (but is a possibility nonetheless) The physical buying pressure exhibited even at slightly lower levels is nothing to ignore.. If they do get hammered, I hope I will be able to run fast enough into the two metals, esp. in Silver's case! I'm sure the Chinese will feel the same way..

BxCapricorn said...

Follow-Up: Certainly appears that silver just experienced the famous "blow off top" which precedes reversals. If it isn't, there's something happening that we don't know about. If the spike is due to trader manipulation, there's a lot of downside ahead.