"Rolla Coastah"

The selling yesterday maybe an over exaggeration due to the news of the italian prime minister stepping down. This really should have come as no surprise as greece is prime minister had recently resigned why would this shock the markets. Everyone knows the PIIGS are in trouble and on the verge of default. So what is all the selling about? I think the point is that people are finally starting to realize that the problem is so massive europe may not be able to find or may not print enough money,  all this beating around the bush about how bad things really are, is leading to investor uncertainty.

As I have written about before, they should just forgive all the derivative debt that everyone on their balance sheets, come clean if you will and start over! But they will never do that they will just print more money will ultimately lead to hyperinflation. Many economists argue that we already have a lot of inflation, look at gold, oil, healthcare, education, all have risen dramatically with respect to household income.

O to the futures and charts, after the 46 point drubbing the SPX took yesterday ,the futures are up 16.4, crude oil is up a 1.23 to 97.82 and if anybody is telling you that we are headed for a deflationary environment they must be insane, just take a look at the oil price.Silver is down 30 cents and gold is down 18.30

Looking at the S&P 500 chart it shows that we are at critical support levels 1229 where the recent break out started, and then stalled at the 200 day moving average (red line)

The advance decline line has also stopped at the top end of its range in the continuation sideways pattern. A break out above 10,600 would be extremely bullish. The mcclellan oscillator is neutral.

Now looking at the precious metal charts using SLV for example only we see the chart shows that had a false break out which stalled at the 50 day moving average and we are the right now at support levels. A break through the lower point will take us down to 31.20. The ugly looking bull flag is still intact.

Now lets look at gold, gold is still in a powerful secular bull move well above its rising 150dma and the short-term trend is still bullish as it is still above it's rising trendline support is a 170, again I'm using GLD for demonstration only.

Looking at the dollar index: chart of the dollar index seems to be breaking upwards as it sounds support at the 150 day moving average how to big days up printed a bull flag this break out should end at 79.20 or less. While there in eurozone disturbance the dollar will catch a bid and the PM's will be suppressed. I am still holding my targets from earlier this week.

 I continue to question the usefulness of technical analysis in a manipulated markets, but what tools are left for the average investor.Trying to make sense of insanity is INSANITY no?

Watchlist: Only on QE news out of Europe or US

 GNW could go to 9.60 and beyond in a heartbeat, taken out its short-term channel, bullish MACD, if it has a pullback is a gift.

 These three steel stocks are prepared for good news. Ans have similar patterns. X clears 30 you will get 10 bucks on the upside, best to wait and see. Early bird usually gets his ass kicked.

 Trade the break out if and when it comes its getting ready to take off. See how all these stocks did after the last QE. You can get a quick thirty percent with AKS.

 ANR (Coal Producer) Breakout over 32 and you get to 43-44

MCHP if it should get over 38 it will make new highs very quickly.

Specialty Alloy producer chart similar to the other steel companies, break out you run into resistance at the 57 range.

Just food for thought

PM Update

Its like watching the three stooges, i'm talking about the Greek fiasco. Pappa Dre (also known as Papandreou) gets slapped on the head by Sarkozy and Merckel and is now basically taken to the woodshed. Marketwatch is reporting that Pappa Dre is going to step down. “The prime minister said that this government is going to pass on power to another government, which he will not lead,” an unnamed official who was in the meeting told the paper. Earlier reports had said a new government could be led by Finance Minister Evangelos Venizelos. On Saturday, Papandreou briefed Papoulias on his plan for a multi-party government that would implement the rescue package devised by European leaders late last month, the Journal said.

As I have said before derivatives and massive debt is the cancer they are trying to treat with penicillin. Austerity measures would have be an utter disaster. Applying austerity measures in Greece would just  lower capital utilisation and productivity and reduce tax revenues thus making it harder for government and its municipalities to balance their books. Debt levels must be inflated away or written off (also read post on Financial Repression).

So more QE is coming and that should be good for most asset classes.

Looking at the chart, we had massive gap down (the deflation scare), went sideways, broke out (filled the gap) and we also have tested that break-out (referendum scare that got bitch slapped). And we are back to the upper end of that range (somewhat ugly bull flag). But the news is good we have an extremely bullish COT report low level of commercial shorts to large and small specs.

 The gold chart is absolutely gorgeous we will be making news highs. Above the 20dma, it never broke its long-term up trend and is breaking out again, again the news and the COT's are bullish.

I'm using GLD and SLV only for demonstration purposes. Buy the metal, the paper will be inflated away as they kick the can further down the road. 

Short-term target for silver, 40 in 2 weeks or less, the faster it takes out 35.50 the faster we get there.

Short-term target for gold, 1900 in 2 weeks or less, probably less.

Caveat: The bozos in Europe can't get together and make a deal happen.

Too Early

I was right and then I was wrong

I warned about the melt down but I was too early


Off by one week!

Greek Scare

Nothing But a  Bluff

Hang on or add longs buy more more QE to follow