Markets For The Week Ending Thursday
July 4th 2008 01:23
For the shortened week prior to the 4th of July, the DJIA closed down 57.97 points, a kind of rest after last weeks 500 point loss. The DJTA lost 230.37 points, almost 5%, yet still hangs 600 points above the January low of 4,032. So far a non-confirmation. That's a piece of good news if you are bullish or looking for a rally in the market.
The DJUA continues to trade sideways, not giving any indication of future interest rate direction and continues to stay above its March low of 466.72. Also good news. However, when I look at the weekly chart of the utility average, I still worry that I'm looking at a huge top, a portent of much higher interest rates if the March low were violated. (See Chart)
For the week, Oil was up $4.13 per barrel to $144.34. I can't call a top here. I will say the first major move went from $51.03 to $99.29 or $48.26 dollars. Then we consolidated for about four months under $100, before breaking out. Technical analysis says this move should be equal to the first or about $48. If we add $48 to the bottom of the consolidation ($85) we get $133. That's been exceeded. Adding $48 to the top gives us $148. Bottom line, we may find that $150 is a barrier on this run. (See Chart)
Let's look at Gold, Silver and the USD, Gold traded about flat for the week. Using the ETF GLD as a proxy, it gained $0.59 (See Chart), the ETF SLV closed at $18 an ounce (See Chart) and the USD finished at 72.72 (See Chart). I still expect gold to break out over $940, get back to $1000 and breakout again to $1200. Silver I expect to see $21 soon and the USD breaking to a new low below 70.
I still like the charts ofthe 2-year, 10-year and the 30-year Treasuries. For all the talk about inflation, yields still look like they will fall. That would not help the USD vis-a-vis the Euro.
We are living through the most interesting times I have ever witnessed in my 64 years!
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