This is a time to be especially alert. The precious metals charts have gone parabolic and the angle of ascent is extreme. We opine (opine is a little different from analyzing, but is close) that a climax is near. The question is whether “they” will be able to bring gold down by a significant amount. The ETF funds now hold such holdings that an all out attack on gold can only take it down for a short period.
Traders and investors in the ETFs can ignore the takedown. It may smart for awhile, but this is just the start of many upwaves. If you are adroit you can hedge with DGZ (hedges GLD) or GLL (UGL) or DZZ (DGP).
This opineion (sic) is reinforced by the euro chart, which has failed to make a new high, so we may be at the climax of that.
We hesitate to announce the end of the dollar down spiral, but we are certainly in some sort of transmission. (Automatic or manual to be determined.)
Certainly, from an economic point of view the dollar is radically oversold. But a determined defense of the dollar here would certainly tank the market and bonds. Given the fecklessness of the Treasury and the nearsightedness of the Fed they are capable of playing with fire in order to make the Chinese happy and deflate the speculative bubble.
Are they really that stupid?
This economy is still on forced oxygen. Take away the oxygen if you don’t believe it.
If you want to let some air out increase margin requirements. That will scare the bejesus out of the market. Also the besatan.
Nonetheless it is for us to exercise extreme vigilance over the very near future as this transition could hit the market in the stomach and leave it breathless.
Technically the market needs an excuse for a downwave after such a run. Technically we don’t want to be left holding the bag while they take it down.