Europe - Inflation over Austerity

If Europe decides to keep Greece, Spain, Portugal,... in the Euro zone there's probably only one way left: http://finance.fortune.cnn.com/2012/05/30/europe-inflation-austerity/?iid=HP_LN

And the winner should be: the German DAX

SP500 - short term update

I actually got rid of all of my shorts except for ORCL. However, in the short term I see more downside potential for the SP500. A turning point might be the 38% retracement at 1340ish. The markets will definitely have an eye on the US figures published on Thursday and Friday (GDP and unemployment rate)...

Gold vs. Miners

Particularly in the last three months gold outperformed its miners. However, in the mid term I'm pretty bullish for the gold miners. In the short term we might see some weakness, but not necessarily...

Bonds - increasing likelihood of lower prices

Chances of lower Bond prices are not too bad. Although the purple slightly falling wedge is usually more a sign of a temporary consolidation I took a long position in TBT yesterday. That's more a mid and long term position.

Gold - started to buy (long term)

I've started to build up positions in gold last week, since I'm VERY bullish in the mid and long term (not due to technical but more due to fundamental reasons). However, from a technical point of view I'd like to see prices of at least 1500 first. Based on the most important retracements traders usually use we might even go a bit lower to around 1430ish (38%) and 1300 (50%, wouldn't expect that to happen). Will buy more at these levels.

Let's have a quick look at the past developments timing-wise. We had 3 years of a bull market followed by a 1 year consolidation. Afterwards we saw the same picture again. I wouldn't be surprised if the consolidation is soon over and history repeats itself again...

SP500 - still bullish in the mid and long term

As can be seen in the long term Russel 2000 chart below (1. chart, monthly chart) we haven't seen lower lows since the latest bull market started in 2009. Since the correction ended above the previous low we might directly go over into a new bull market (although we haven't seen new highs as opposed to the SP500). I cannot see a scenario going below the 2011 lows in the near future.

This theory is strongly supported by a big support area between the current level and the 2011 lows indicated by the huge volume (2. chart, monthly chart, volume at price) in the long term SP500 chart.

Put-Call Ratio

There's no way yet to draw any conclusion regarding the future stock development from this put/call ratio. Maybe Friday was just a one day spike. But if we stay on this level for a while the setup is not the most promising for rising stock indices. However, it might provide a good environment for a bullish market further away in the future...

TLT - short term bullish, long term bearish

Here's my expectation for the Bond market. Stocks should be negatively correlated to that.

SP500 - my short term expectations

see the little arrows for my short term expectations for the SP500. We might see a little rise before the bears take over. However, please consider that these pictures are dynamic and be ready for a change...

USD - 2012 the year of the USD?

If that works out (see monthly chart below) the USD should be the currency to hold in the near future. Does it mean Greece, Spain, Italy, France, Netherlands, Germany, etc will soon make negative headlines again. It might start tonight :)

That also wouldn't be the best setup for the bulls in the stock markets. Although the negative correlation of USD and stock markets was not that significant lately.

AUDUSD - Short term short

Not the best setup (2hour chart) but still worth a try with a tight stop...expect 1.025ish soon. 

EURUSD - what's next?

Technically it's all set up for a  break to the upside. On the other side I wouldn't be surprised if we go for a dive again - in particular if Hollande will make it. We shall soon find out...

Apart from that a long in USDCAD and a short in NZDUSD might work out in the short term.