Saturday, January 30, 2010

Hmmmm Gold!

     The precious metals are about to make their move to new highs for the last time.  Technically the dollar looks to be close to topping out short term.  I see this latest move as a 4 up of an overall, and last, 5 waves down.  Fundamentally speaking I am not sure what will happen to support the charts...A higher unemployment number for January, the Republicans actually agreeing to a health care bill, who knows what.  What I do know is that the charts do not lie.   See for yourself.....

I see the dollar topping out Monday or Turnaround Tuesday.  After doing so it will make a 5 wave drop down to $72.5 or below.  This will bring strength to commodities and possibly the SPX (depending on how earnings are going).  I prefer commodities and gold at the moment since they are currently inverse to the dollar.  One ETF I will put on the watch for Monday is DGP.  It is a double for gold.  My charts indicate it will take out the high of $32.97.  The decline of the dollar since March 2009 is the main lift to the stock markets and the charts say there is one more lift to go.  Some more proof of the dollar topping out is a view of the weekly Slow Stochastic listed below. ...
As you can see the weekly line dipped below 80 signaling a corrective move but then reversed telling of an intense speculation buy and what I see as a soon topping out process.  This move should fizzle out into the start of a final move down this coming week and lasting several months.  I look to see the MACD return to the -2 area before the dollar eventually gains strength for good.  The most beneficial plays will be the commodities.  Good Luck and Happy Hunting.

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