Tuesday August 28 2012
I think Ramki is underestimating the exact high but he has the right idea, and this is in line with his previous predictions of 1475.
Bernanke delivers his annual Jackson Hole Speech Friday Morning. Interesting that the Kansas City Fed Sponsors a meeting in Wyoming ,wonder how that plays at the Kansas City Chamber of Commerce?
This may or may not come up, a positive article on coal.
NYSE Advance Decline Volume
Most of the internal inductors look like this chart. The NYSE A/D volume has crested the four moving averages and has pulled back in yet another of the slowly grinding higher tests since the low June 1.
The financial media follows the FED Chairman like the National Enquirer used to follow Liz Taylor. And it means about as much. Now that every time horizon of the Treasury Market is publicly traded in Chicago, as Jim Rogers says, the FED is a player and tends to follow rather than lead the market. If the market thought inflation was raging out of control there is no way the FED could keep rates down, but you won't hear that in the speech Friday.
GDXJ What the US Dollar, UUP, Sees When It Looks in the Mirror
GDXJ has become overbought on the daily chart, see CCI at bottom. The tech rule is that old support becomes new resistance. The resistance is the 22-23 range back in April. GDXJ has spent four months since shaking out the seller and finding new buyers. Interesting how the rubber ball of GDXJ has gotten to the top of its arc, and now falls back a bit.
UUP The US Dollar
Okay, this blog is named The Market Perspective for good reason. Here is the same chart time frame, same indicators, but using UUP for the US Dollar. It is the mirror image of GDXJ. NOte how each market, GDXJ and then the Dollar consolidated in April. To me these charts are a literal depiction of how the two markets are playing tug of war with one another. And with the FED speech Friday there will be plenty to speculate about. The media once focused on the size of the stack of papers Greenspan carried into a speech or some such. Maybe we will see speculation about Bernanke's beard for lack of anything else to say this week.
But at the end of the day, which way will things go? Our bet is on GDXJ but we may have some surprise spikes in gold shares, the Dollar, and bonds before this is all over. And it is the end of summer, one more week, and the end of August. No wonder time travel is such a popular subject for sci fi writers...It would be much handier to fast forward ourselves to post Labor Day to see the resolution.
A Short Term Look at TLT
I am guessing this is the extent of the bounce back in TLT, see blue box, but just guessing.