SP500: Both my trading signals (based on VIX and Put/Call ratio) are still bullish. As expected, the major short and mid term trendlines above the S&P seem to be a tough resistance. Initially I didn'tl like the massive drop on Thursday. However, markets showed a nice reaction on Friday. In case markets shoot up I expect a massive resistance around the main bear market trend line around 1340. All bears will jump on that signal and go short.
US Bonds: In the long run the bond market is in an uptrend. However, it is way overbought. I expect falling bond prices in the short term. The most recent short term uptrend is already broken. Additionally TLT shows a nice double top pattern.
Gold: still in a long term uptrend. In the short term the triangle should break soon (price hit the edges 5 times) bringing gold prices further down. I hope this will go hand in hand with rising stock markets. However, gold and stocks were highly correlated lately.
USD: The USD is forming a contracting triangle now for about 6 years. I expect this index to go lower and eventually break this triangle in the near future. However, China for instance should have a massive interest in a strong dollar. If the Index makes its way above 80.50 I'd expect a retest of the upper boundary at around 87.50 which would send stocks down.
Commodities: still bullish on agricultural commodities
Trading ideas: short gold, short bonds (e.g. long TBT), long agricultural commodities.
Major warning signal: If USD index continues its recent uptrend and forms a "higher highs" pattern above 80.50.
Trading ideas: short gold, short bonds (e.g. long TBT), long agricultural commodities.
Major warning signal: If USD index continues its recent uptrend and forms a "higher highs" pattern above 80.50.
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