Tuesday July 17, 2012 / Monday July 16, 2012
The Far East markets are picking up from their 2009 lows.
Peter Brimelow has positive article on gold.
An alert Market Perspective Reader brought this article on Chinese Delveraging to our attention. Basically the Chinese have continued construction projects hoping that their pre-2008 manufacturing business would return, it has not. And so they are left with an incredible amount of empty buildings as the now famous Ghost City in Mongolia represents. We identified the top in China and India in the Fall of 2010, the SSEC continues to fall. But I don't think it it going to fall apart quite yet.
I remarked on the irony of Congress getting uppity over Chinese made USA Olympic uniforms, this article does not address the issues nearly as well as the comments to the article. Note that one fellow mentions spreading the fixed cost over a merer 4,000 uniforms.
Energy Wakes Up
Gold Stocks versus Gold
This is a ratio chart of the large gold miners versus the price of gold. Miners have been retreat since
early 2011. We think a bottom and potential reversal is forming here.
British Pound Note the Action Monday
There may not be a German Mark or a Greek Drachma but there still is a British Pound. Note the succession of higher lows first in January, then June, and now mid July. This is a sort of short term version of how gold bottomed over the 1998-2000 period.
Note the strong action in BP in Recall we noted that the Aussie and Canadian Dollars were also advancing. Both are now working to overcome their multiple 50 125 200 MAs.The rally will not really get going until the Public begins to leave the Safe Harbor of the Dollar and long bonds. While the US Dollar is higher, both RSI and MACD are diverging with lower readings. That is how tops are formed.
The move to under 1.5% on the ten year yesterday is just setting up that much more potential rally as investors realize they are in the wrong sector for the remainder of the summer.
Monday trading while CNBC lamented that it was yet the seventh down Monday in a row or something like that. This is typical of the public throwing in the towel after examing their poor performance over the weekend. This morning Tuesday both Hong Kong and Shanghai are up.
Gold exhibits the same Little Cat Feet pattern of higher lows as the British Pound. the battle is being waged now at the 50 day MA. In the last chart the British Pound is just about there as well.
Patience, there is no way the markets are going to collapse with the PIMCO group in their Safe Bond Harbor. They must put out to the Open Sea of Stocks first. Still don't believe this scenario?
Fidelity Global Commodities
Here is a great picture that again confirms, the Currency and Gold Bottoms. FFGCX exhibits both a
rounded bottom and a reverse head and shoulders centered at the low ofJune 1. Since then it has put in a series of higher lows indicating buying is coming in again and again. At blttom the CCI confirms this action. Note it is about to vault the 0 level. The Three MAs are headed up.....Stay Tuned.....