Blog

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 – 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 – Since March 23, 2001, we have been holding goldgrams as our Core Currency Position. On May 4th traders sold the US dollar by shorting the Dollar Index at 83.97. Stop out this trade if the Dollar Index closes above 81.10. It appears that the Dollar Index is beginning to accelerate toRead 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.

Beginning in April, the dollar fell pretty much in a straight line into early June. Since then the US Dollar Index has moved sideways on either side of 80, and it has clearly demonstrated an inability to rally, which is a sure sign of underlying weakness. It is also a good indication that the next major move for the dollar in all likelihood will be down.

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

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

The DJIA could not climb above its 200-day moving average and has now slipped back below overhead resistance (the horizontal red line on the chart). The Dow looks oversold and could bounce, but for now, the trend is pointing lower.

July 10, 2009 – As is clear from the following chart, we can see that there was some technical damage to the XAU Gold Mining Index.  After finally climbing above the key resistance level around 134, the XAU dropped once again into the high 120s.  This outcome is of course disappointing, but the technical damageRead more

June 29, 2009 – The Dow Jones Industrials Average is at a very interesting juncture. Please take a close look at the following chart. As the dollar moves toward hyperinflation, I expect stocks to rise. I explained this point in recent letters. The general averages will not do as well as gold, and certain sectorsRead more