Weekly Trends - 6/20/08

SPX

Boy, was i wrong !

I made a call just a day before the May top and projected a target of SPX 1350-60. My targets were met, but got undershot. But the IT trend was up in my book as long as SPX 1324 held. Given that we held SPX 1324 last week and got a divergent buy setup (a 70% odds signal), i thought we had begun the next upleg towards SPX 1500 +/- 20 points. The market action this week clearly proved me wrong. Now that cancels my SPX 1500 +/- 20 points projection.

Now the next support of importance on the weekly charts comes around the 1280-90 area. The 1404 double top has a measured move to SPX 1300 on the daily charts. So it's safe to say we should bottom somewhere in the 1280-1300 region. A bottom here could happen by a basing action, with multiple retests in the 1300 area or a climactic drop into the 1280 area. Which one ? I have no clue. Whenever the next buy signal on my daily charts show up on my trading system, i will post here (right or wrong !).

Gold, Silver and Dollar

As i said last week, there are no easy trades in these markets, as the weekly charts are pretty much neutral i.e sideways action, with the weekly 34 EMA flattening. A trending move is about begin in these markets pretty soon, looking at the basing action in the Gold/Silver on the weekly charts and the rejection of the 34 ema on the Dollar index weekly charts. Essentially the inflation theme continues in these markets.

Inflation is running out of control in the asian bloc. Many countries now have official inflation numbers in double digits. Some of the countries like vietnam have inflaton running above 25%. India's official inflation numbers which were barely 6% a few months back now stand at 11%. Wow, nearly 100% increase in a few months. Gotta beleive these govt numbers. Now how does this play out. Will this enter a runaway inflation mode, furthering the commodity rally or will the central banks tighten real hard and cause a commodity collapse ? Who knows ? That's why i hate fundamentals. Sorry for digressing, but the inflation situation looks alarming !

No positions in any market, but looking to enter soon, based on confirmation.


Good trading !