Some commentary across the markets as we reflect on May and look to June. This will be without charts for now, as I'm using my iPhone from our sailboat - great attitude adjustor, by the way! Also good practice in appreciating waves, and wind shifts. Which seems important across the markets now. After the early May highs, the markets have consolidated - or churned, if you're feeling bearish. That poke up Friday afternoon looks like a small 5th-wave thrust from a small triangle. As many are discussing it, including the EW significance, I'd like to focus on the slightly bigger picture: I can see about 950-960 if the SPX moves higher, but I and others have shown the resistance that's stalled equities indices since early May. Now the potential reversal time windows are pressing closer.
In my reading today I came across this blog, http://kennystechnicalanalysisblog.blogspot.com/. Kenny there has some good points about the technicals that my readers should appreciate. And he includes a link to an analysis by Carl Swenlin about gold, that I believe is important. I've known for a long time that gold's $1007.70 high was a new all-time high measured in other currencies. One of the reasons I've pointed out that the (B) wave scenario cannot be ruled out. Couple that with our recent observations about possible reversals in the dollar and euro - and possibly oil, and the thin ice equities are on - and perhaps support for Treasuries, now or soon - and the juncture markets are tracing is coming into starker contrast.* Sure, I've made similar comments for about a week - the markets have just continued to edge closer to their limits. For example, yesterday both oil and the euro flew just above key Fibonacci levels. My experience trading Fibonacci patterns is, that's precisely when to look for trend reversal. Gotta wait until early next week to see whether or not that shows up.
Notice this juncture about currencies, gold, oil, bonds, and equities points to the center of the inflation/reflation versus deflation see-saw. And we may experience that moving one way, before a longer-term movement kicks in. I suggest investors and traders adopt the "show me" attitude I recommended when the banks seemed ready to break out. The banks failed to do so (unlike GS, but it's got to be watched as in a potential Fibonacci resistance zone on its own chart now) - so I sure hope my readers didn't get stuck in that propaganda trade. All these markets appear close to having to choose soon. I might hypothesize that the dollar and bonds soon get the upper hand over the euro, equities and maybe oil and gold ... but I'll do my best to keep that "show me" attitude too!
*update - saw this too: U.S. Dollar Looks in the Mirror at U.S. Stocks (EWI, 5/28/2009) - nice depiction of this, although they didn't manage to catch the right target for that (c) wave down in the dollar which we got at symmetry, or actually likely tagged that downtrend line yesterday (and I would hope my readers can fill in the blanks in that redacted version Hochberg discusses, either based on the channel lines or using what I've posted recently on euro!).
Quote from Latitudes & Attitudes magazine (June 2009 issue #109): "Not one shred of evidence supports the notion that life is serious."
If that doesn't give you a laugh, get on a boat this weekend!
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