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Is This December Similar to 2007 & 2008 for Gold & Stocks?
Chris, The Gold and Oil Guy, asks "Is This December Similar to 2007 & 2008 for Gold & Stocks?"
Thus far in 2011, the overall stock market movement has been much different from what we had in 2010. This year we have seen nothing but sideways to lower prices with wild price swings on a day to day basis. There just has not been any really solid trends to take advantage of this year. Instead we had to actively trade the oversold dips and sell into the overbought rallies to just pull money out of the market on a monthly basis. Last year we saw 3 major rallies that lasted several months making it easy for anyone who bought into the trend to make money if managed properly.
Looking forward to 2012, it looks as though we are going to see some major changes unfold globally that will change the way we live our lives. Unfortunately, it's a very negative outlook, but I do have hope that something will be done to perserve are somewhat normal lifestyles. I’m not one to talk doom and gloom, there are enough of those guys out there already so lets stick with the charts and focus on what is unfolding now in the present and how to take advantage of it…
The charts below show what I feel is likely to happen going into the new year IF we don’t get any major headline news in Europe that triggers another selloff.
Intermarket Analysis:
There are a lot of different things unfolding within stocks, commodities, currencies and bonds right now. And it is important to know that investments are inter-connected in some way. For example, if one investment moves sharply in one direction, it will have an effect on other investment classes.
My eye is focused on the US Dollar Index which has recently had a strong run up in price. For the past couple years we have seen stocks fall when the dollar moves up. So with the dollar index now trading at a key resistance level we should see the dollar top out for a few weeks and spark a Christmas rally into year end. After that, all bets are off and we re-analyze…
On the flop side of things, if Europe comes out with major negative headline news we could see the dollar index continue its rally and breakthrough this resistance level. If the dollar moves higher from here we could easily see a multi month run up in the dollar. You do not want to be long stocks if this happens, get short stocks and hold on tight.
Gold Daily Chart Analysis:
Here is my positive outlook for gold and what I feel is likely to unfold near term. But keep in mind what I just said about the US dollar index above. If the dollar continues its rally and breaks out, it could actually put some pressure on gold. I know gold is a safe haven so I do expect it to hold up, but a strong dollar will neutralize a lot of the buying in gold in my opinion.
SP500 Daily Charts:
Stocks should have a solid bounce this December if the dollar finds resistance and pulls back in the coming weeks. I am expecting a bounce of 5-10% if all goes as planned.
Christmas Holiday Rally Trading Conclusion:
In short, we are entering a tough time to trade the market. Volatility is low, there are a few holidays and typically we see volume thin out as December unfolds. Light volume generally favors higher prices for stocks and commodities which is one of the reasons we get the holiday lift in prices.
The recent selloff in stocks is looking overdone to the down side and ready to bounce any day. So I am looking for signals to get long the SP500. Overall risk remains very high as sellers are still in control of the market, and we are looking to put on a trade against the intermediate trend which is down.
On Friday morning, we exited our short position on the SP500 at the open, locking in a 13.5% profit. We exited the position because the intraday charts are showing signs of a potential bottom and we want to avoid the tear your face off short covering rally that I feel is just around the corner. Now we are waiting for a another low risk setup and will take action to go long or short depending how things unfold in Europe.
I hope this report helped shed some light on the current market condition for you. Remember you can get my daily pre-market trading videos, intraday updates , and trade alerts with my premium newsletter: TheGoldAndOilGuy.com
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The charts below show what I feel is likely to happen going into the new year IF we don’t get any major headline news in Europe that triggers another selloff.
Syntax error in the IF statement: everything that follows is discounted 90%. Traders think deterministically and proclaim direction; risk analysts think probabilistically and proclaim magnitude (and avoid the discrediting "if"). There's a world of difference.
In short, we are entering a tough time to trade the market. Volatility is low
bullshit on the vol
The elite have been grabbing all the physical gold and silver that they can get their hands on, so I wouldn't be surprised if one day soon they allow the paper currencies to crash - and make out like bandits in the process.
All I can suggest is that people get all the gold and silver and physical assets they can too.
Read:
http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref
lots of red and green, I'm getting in the spirit already
ilene
with such foresite in calling the moves ,
why are you not on your yacht in the warm pacific.
it always amazing that the chart callers are giving away free informartion rather than doubling down ten times and leavinga billionaire
will this chart reading ever stop the frantic race to lose..
and if ilene with a simple look.. how does she compete with the market movers who guide the market higher or lower . s like the football team givng their game plan to the other team three days before .
why do they do this pure hubris and i am the king of bunker hill at chart calling .
those who bought gold and 500 and held are up 300% by show of hands ,, who has done better in their trades ,
if so the very world is yours .. as the hedge funds will pay a kings ranson for those kind of returns , but alas,, the truth be known all the chart callers do is sound and fury signifying nothing.
dumpster,
Sorry, can't call the moves, I'm submitting articles by traders who are explaining their reasoning. Some of it is conflicting. If I knew where the market was headed, I might be enjoying my new yacht in the warm pacific rather than working....
Yes Ilene, I recently through my turkey bones n carcass, along with several nuggets of gold on the ground and divined it's price direction. It then dawned on me, the syndicate just might be the diviner, and I, the turkey carcass.
Hook Line and Sphincter ( ! )J
Market bounced today off oversold conditions, there is still a lot of negativity out there, any silly news will fade this rally, any "good" news will skyrocket the markets!
Traditionally Dec is a good month, lets see where the bulls are taking us!?
On 06/30/2011, Nomura Holdings reported holding 389,841 shares with a market value of $56,916,786. This comprised 1.54% of the total portfolio. On 09/30/2011, Nomura Holdings reported holding 627,435 shares with a market value of $99,172,375. This comprised 2.29% of the total portfolio. The net change in shares for this position over the two quarters is 237,594. About Company: SPDR Gold Trust is an investment fund incorporated in the USA.
http://wallstcheatsheet.com/stocks/nomura-holdings-boost-big-positions-i...
Nomura also said oil will rise to the $250 range.
Who knows?
Nomura also said oil will rise to the $250 range.
***************
Turn out the lights if it ever gets there-
With demand falling-i suspect we'll see $80 before we see $200-