by Greg Harmon
Wednesday US Treasuries ($TLT)
delivered a smack down, putting the US Equity Markets ($SPY) and
Gold ($GLD) in their place. This was detailed in the
link below. Thursday this continued with the US Dollar Index, Copper and Crude
Oil taking sides. Let’s take a look.
The US Dollar Index ($DX_F, $UUP) was
the big winner launching through the 3 year rising trend resistance out of a
bull flag. The measured move out of the flag is to 80.10 but it has some
resistance along the way at 79, and then 79.28, and 79.60. The rising Relative
Strength Index (RSI) and increasing Moving Average Convergence Divergence (MACD)
indicator support more upside. Like Rocky Balboa, almost down for the count, it
is rising up off the mat to take on the world, joining Treasuries.
Copper ($HG_F, $JJC),
thought by many to be the tell for future market direction, responded with only
bad news. Falling through support at 3.69 and now attempting to hold support at
the 61.8% retracement of the move higher from June 2010, at 3.46 it’s best hope
is that the RSI is becoming oversold. That said the trend is down and the
indicators suggest more to come. If it is a market tell then this is not a
pretty story to come.
Crude Oil ($CL_F, $USO) was
also a casualty of the recent global moves. It finally broke the bear flag
lower, and now sees its next support at 77 and has a target on a Measured Move
to 70. The RSI and MACD also point to more downside.
Looks like the new world order, at least for the short run, has been set over
the last two days. US Treasuries and the US Dollar are in charge and driving all
risk assets and economically sensitive assets lower. Treasuries and the US
Dollar up, at the expense of the US Equity Indexes, Gold, Crude Oil, and Copper.
Paper promises outperforming hard assets and profitable companies. May God help
up.
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