I’m expecting a major trend reversal next week. Possibly large enough to be very disruptive to financial markets over the next 3-4 weeks.
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Gary, did you just give up on the NASDAQ revisiting the 5100 high?
Not at all. the major trend reversal I’m talking about isn’t in the stock indexes although it may force a deep intermediate degree correction in stocks. Once the correction is over stocks are going to rocket launch towards 5100 and maybe even considerably above that level.
My guess is the reversal has to do with Gold …… my lasts couple posts here have been in regards to a multi-week Gold rally at the same time the US Dollar is rising aggressively – a very unusual circumstance that doesn’t happen very often.
A change in gold probably would not have much affect on conventional stocks BRICS – unless it crashes dramatically. If it does it will take down a lot of people who have bought into the miners.
The currencies are where we have had the big trends – weaker Euro and US Dollar strengthening against everything else. A change in one would impact the other and have a huge affect on the conventional markets.
The other currency option is the Yen soaring up against the USD but I have seen no evidence that this is at all likely – the Yen is like a 6 stone weakling who just has gone 99 rounds with Cassius Clay.
Then, of course, you have oil… and oil is something that I begun to think about buying last week – USO mainly – as I wonder if oil is due a bounce up to the 60 buck mark.
If oil goes up it could have a dramatic affect on all those consumer stocks.
p.s.
I still know nothing.
If the ECB QEs what happens to the Euro and the Dollar?
No EU QE and the Euro will continue lower and the USD get stronger.
EU QE on Thursday and the Euro will, in theory, strengthen.
If the USD goes down in relation to the Euro then people outside of the US will flood into US stocks and Dollar denominated commodities – metals, oil, etc.
But, on the other hand, perhaps then the European stockmarkets will look cheap compared to the US and QE money will flow into European stocks?
p.s.
I don’t know (Which is probably obvious.).
Hang on, several articles in the UK today are saying that EU QE will WEAKEN the Euro against other currencies.
Gary, is it Euro up and Gold up or a fail of Gold meaning lock in recent GLD profits?
Pay him the 10 bucks yoou cheapskate 🙂
My two cents is that the EC will stimulate, but unfortunately too little too late, yes we will get some kind of surge out of this. But I think oil will continue its downward trend. And then we will see the deeper effects on the economy and unemployment show up. The Banks will take a hit, I also think we have some unforeseen on the horizon i.e. Russia ukraine greece. I see all scenarios as a positive for the metals either way now. Im buying on dips now
The French President let slip today that EU QE is coming on Thursday and then he had to quickly backtrack on what he had said.
The consensus in European financial media now appears to be that it will cause the Euro to tank.
With the imminent demise of the euro watch for the swiss to pull another trick out of there hat any day now . Would not be wise to be short Gold right now.
Im standing aside of the equity markets right now, I do not have good enough seat belts to withstand the coming whiplash.
Gold has had a cracking run – but don’t bet big ahead of Thursday
http://moneyweek.com/money-morning-gold-price-and-ecb-qe/