Based on the 7-6-2012 Close published Sunday, 7-08-2012.
Market Timing Brief™ for 07-06-2012
The US Dollar Index remains strong, which means trouble for US multinationals competing in Europe. In fact the US Dollar Index made a slight new recent high that must now be confirmed. UUP is just slightly below that breakout point.
The chart is here: UUP – US Dollar Index ETF – Bonus Chart of the Week: Bonus Market Timing Chart of US Dollar Index
Of course, that helps European companies and their economy, which is now affecting ours and around we go! It would be interesting to see what would happen if there were ONE currency and no country could cheat its savers out of their money in order to balance their debts. This is not what Dr. B ordered and some say he’ll push the Fed to do QE3 as early as July, not because it worked last time, but because he wants to be “doing something.” Maybe doing nothing would allow the economy to heal naturally instead of rewarding the likes of robber barons like Jamie Dimon of JP Morgan who gives his local depositors 0.01% interest and smiles…all the way to his bank account while proceeding to oversee one of the worst risk management operations in the world. The bankers claim, “We have to recapitalize the banks!” What is being recapitalized is JPM shareholder stock. JPM is a member bank of the Federal Reserve. So the Fed has the power to steal from us and give our stolen money to the banks. Their position is obviously that doing so helps everyone, but I disagree. I believe there has been a loss of responsibility in their fix for the financial system.
Dollar strength is now pressuring gold and the other metals which were just starting what looked to be a rally. It is back to the starting line as the chart shows. The metals may not fall all the way back to support but the luster is dimming on the rally.
GLD Gold ETF Chart: GLDTracker™ Chart
Meanwhile, the SP500 Index has topped out at the May 2011 high and is pulling back. It could rally back up through there of course, but I doubt it will without at least a mild pullback to the support line shown in the following chart:
SP500 Index: SP500Tracker™ Chart
Earnings start this coming week and they are purported to be weak. But how weak? There were a few notable earnings pre-announcements from the auto manufacturers and from P&G. The issue is also whether many other companies bring down guidance for the next quarter as well. Remember that the European slowdown causes further slowing as other businesses then have to pull back who were servicing the slowing businesses.
The VIX has fallen to a significant support area and has plenty of room to bounce. That means the SP500 has room to fall. AAII Sentiment is not at either extreme. Here are my comments on this week’s sentiment data: Survey Says! AAII Investor Sentiment
The stock and metals markets are pointed down at this time. Housing is one market that is still holding onto a clean breakout. REITs on the other hand look toppy here: REIT Index Chart
Let’s see what the reaction to earnings is. Stocks should go down on good news and bad if the sellers are convicted.
Standard Disclaimer: Remember, it’s your money and your decision as to how to invest it.
The above is the text from the 7-08-2012 “Weekly Wall Street Sun and Storm Report™. To see the rest of the current issue and this week’s ratings of all 35 markets I follow and receive the newsletter every weekend, subscribe here:
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