holiday update

SHORT TERM: US market closed
Overnight the Asian markets were all lower, but the DAX managed to gain 0.20% while the FTSE was closed. US index futures traded slightly higher, Bonds were off a few ticks, and Crude gained about $1.00 to $133. While the bull/bear stock market debate continues, we’d like to point out an empirical observation about OEW. Nowadays there are many markets that can be easily traded by the average investor. Exchange traded funds have created many of those opportunities. Therefore, as an investor, it is not longer imperative to concentrate solely on the US stock market, or any stock market for that matter. There are many alternative investments such as; Bonds, Commodities, Currencies and the Precious metals. With these new opportunities, it becomes far more important to concentrate on bull markets, and less important on bear markets, or those markets that are possibly in the transition stage. OEW clearly defines, objectively, which markets are bullish, bearish, or possibly in transition. Much like the medium term trends that require confirmation by OEW, the long term trends that create bull and bear markets also require confirmation. The following is a review of the markets we follow and their confirmed long term trends:
US stocks – bearish
Europe – bearish
Asia – bearish, with some exceptions: China, Hong Kong and India.
Canada/Brazil – bullish
Bonds – bullish, but expected to enter a bear market.
Crude – bullish
CRB – bullish
Gold – bullish
Euro – bullish, but expected to enter a bear market.
As you can determine from this list, stock markets worldwide still present some risk. Bonds and certain currencies also present risk at the current time. Commodities, however, are solidly in bull markets, and the downside risk is limited. Although this sector has been known to be quite volatile. As an investor, the best time to enter a bull market is near the end of a correction, or the beginning of the next uptrend out of that correction. Upon examination of the commodity sector, using OEW analysis, we find the following: Crude has been an uptrend for a few months, and has risen nearly 60% during that time – wait for a correction. The CRB has been in an uptrend for even a longer period of time than Crude – wait for a correction. Gold and the precious matals just experienced their biggest correction since 2006, after Gold reached $1,000/oz. It bottomed recently at $846 (futures) and has risen to $935 (futures) this week. It appears to be just coming out of correction and to be starting a new uptrend. In summary, of all the investment opportunities available at this time Gold offers the best opportunity. Enjoy your holiday!

About tony caldaro

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31 Responses to holiday update

  1. tony says:

    Hi Peter, the previous downtrends in this bear market have all started with some complacency.
    They have dropped about 80 points (1360 would fit now), and then rallied about 60 points, before heading lower.


  2. mact3333 says:

    personally, I think its abit early to load up more short positions…I think we will see a countrend-trend rally to 1400ish on the SP for a 50% retrace of last weeks losses and then the selling will resume….I will double up my short positions when we see 1400.


  3. Frank says:

    another thing… mega phone forming on 1 minute chart of SPY… look at the volume on top of this rise… look like distribution?  large volume on top but not going anywhere on price…?


  4. Frank says:

    Peter, ya, complacency… look at call buying with ISEE (I\’m really interested what it would close by today end)… and CBOE drop quite a bit fast couple days… today drop even more… bull feeling this is just a pull back from overbought level… they think oil has gone crazy parabolic and when oil break it\’s back, market would rally…


  5. FTLurch says:

    Be sure to save some powder for 1410/1414 … we\’re going to see it before any additional weakness :).


  6. MCKennedy says:

    Still a bear here & holding some other shorts but long SPY just to the Dow 12800ish level……….


  7. Neo says:

    Just be aware that the heat may be too hot to handle at the top..


  8. Frank says:

    We may get another jump tomorrow morning on GDP… anyway, government can manipulate these number so out of wack… like Tony said, we need a non-political 3rd party to do these numbers (GDP,CPI,PPI,etc)… but ya, right, dream on…
    I don\’t know why, but usually short week alway (well most of them) seem to have positive bias… weird…


  9. Frank says:

    Yes, I think I stated last week, if not on this site on another blog site, that I believe 1383 would become "insignificant" by ways of crossing above and below several time before we resume down… too many TA looking at 1383… market will catch both side of trade… I think we just crossed it now and you can see SPY had sudden surge of volume… I guess whole bunch of shorts covered… they probably had buy stop set around 1383… so market will get those money…
    I believe amos is right… probably adding as we go up, because eventually this would just be another rally sell into I believe, in fact I\’m adding to my SDS too… 🙂


  10. Amos says:

    Not covering…Matter of fact adding…
    1385 was my first target….
    Sooner or later its going down.
    Time is on my side…
    God bless Amos


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