Blog

July 27, 2009 – On July 13th traders sold short the Sep’09 T-note at 118-21. The yield on the 10-year T-note that day was 3.38%. Stop out this T-note short-sale if its yield closes below 3.32%. For convenience, I am going to begin tracking interest rate trades on the basis of the T-note’s yield atRead more

July 27, 2009 – The red horizontal line on the accompanying chart of the gold/silver ratio marks what had been resistance at 69. That resistance line eventually gave way, leading to a deeper correction, which took the ratio all the way up to its 200-day moving average. Fortunately, resistance at its 200-day moving average held,Read more

July 27, 2009 – Silver has also bounced over the past couple of weeks since the last letter. In fact, silver has outperformed, rising 8.5% during this period compared to gold’s 3.3% climb. Turning to the page-3 silver chart, there are a couple of important observations. As noted in the last letter, silver did slightlyRead more

July 27, 2009 – In my previous commentary, I advised that “the worst is over and further, it looks like both precious metals will bounce from here.” We did indeed get that bounce, but it was from an extremely oversold condition. Consequently, we need to give the market more time to prove itself. Even thoughRead more

July 27, 2009 – I have updated the same chart of the Dow Jones Industrials Average presented in recent letters, but also made an important change by re-drawing the red line that had been marking overhead resistance. Please take a close look at the following chart. It is clear that the red line has becomeRead more

July 25, 2009 – The XAU Index is again testing overhead resistance at the 152-154 area, which has been discussed many times recently.  Like gold, the XAU Index may also do some ‘backing & filling’ over the next few weeks.  But the trend remains up.

July 13, 2009 – The chart below  presenting total US employment over the past twenty years was prepared by the Economic Policy Institute. The EPI is a Washington-based think tank that focuses upon the interests of low- and middle-income workers, with particular reference to their economic condition. This chart and an accompanying article about theRead more

Silver (and gold) have been pushed into an extremely oversold condition. Silver, for example, has dropped on 7 of the last 9 trading days, declining 10.5% during this period. That is extreme selling pressure.

Gold has been pushed into an extremely oversold condition. Fortunately though, and quite remarkably given this relentless selling pressure, little damage has been done to its chart. So while gold  dipped back deeper than I expected, I think the worst is over and further, it looks like both precious metals (gold and silver) will bounceRead more

July 13, 2009 – The countertrend rally in the price of long-term government paper is probably over. The reality of too much federal government debt that needs to be borrowed is about to overwhelm the debt markets and send yields higher. The 30-year T-bond is already showing signs of weakness. It is only a matterRead more