|
Financial Sense Home l Market Monitor l Market WrapUp l Storm Watch l About Us l Contact Us |
||||
We believe that investors need to pay some additional attention to gold and gold stocks. The current chart pattern sometimes resolves with a fake break down, which is then followed by a ferocious rally (see chart). If the HUI breaks channel support, wait to see what happens once it gets into the 220-210 zone. If it reverses strongly to the upside and gets back into the channel, things can get really interesting very, very fast.
Take a good look at the current set up. The BSE rolled over while price has continued to rise. That means the current leg of the rally is the last one. Therefore at this point there are two possibilities: a) Either the "last leg" is not over yet, or, b) Friday's reversal did mark the end, and the price action we saw on Monday and Tuesday was nothing but a "dead-cat" bounce. If the indices can't get above last week's highs within the next two trading days, then in all likelihood today's will turn out to be a dead cat bounce. If last week's highs are exceeded on a closing basis, then we have to continue to give the benefit of the doubt to the bullish case.
Take a good look at the current set up. Just like the BSE, the T.O. rolled over while price has continued to rise. That means the current leg of the rally is the last one. Therefore at this point there are two possibilities: a) Either the "last leg" is not over yet, or, b) Friday's reversal did mark the end, and the price action we saw on Monday and Tuesday was nothing but a "dead-cat" bounce. If the indices can't get above last week's highs within the next two trading days, then in all likelihood today's will turn out to be a dead cat bounce. If last week's highs are exceeded on a closing basis, then we have to continue to give the benefit of the doubt to the bullish case. Conclusion: Last week, the indices held up until Thursday, and then on Friday, which happened to be options' expiration day, investors and traders all of a sudden rediscovered that high oil prices, lower dollar, higher inflation, monstrous twin deficits, disappointing corporate profits, and renewed violence in Iraq didn't exactly match with the SP "knocking on heaven's door" at 1200! Historically, the upcoming week tends to be rather positive going into the holiday. Consequently, the most probable scenario is a bit further decline perhaps to the 1160-1150 in the SP, and 2000 in NASDAQ the first two days of the week, and then a rally on Wednesday and Friday. In any case, I don't put that much significance on the price action during a short week because of a major holiday. Having said that, I also strongly advise you to be prudent, and not to trust the market; if support gives way this, or next week, lighten up on at least any long positions that haven't been acting well. If a stock kept acting poorly while the major indices advanced non-stop for four weeks, then more than likely, it won't act any better if the market begins to go down! Special
note: Happy Thanksgiving! Humbly, Ike
Iossif
|
||||
|
Home l Broadcast l Market Monitor l Storm Watch l Sitemap l About Us l Contact Us |
