I am patiently observing this long-awaited pullback in SPX. What I really do not want to see is many traders and fund managers wanting to buy a dip below 1200. If they all want to do the same thing it will not happen. I sure hope they all get really scared by Italian govt collapse. Way too many started to feel comfortable above 1250, lets wash them out. Healthy pullback to 50 dsma is much needed (shhhhhh, do not tell anyone).
Speaking of collapse... Remember what I said just short 6 days ago, when Greek govt was on the verge of collapse due to parties bickering? - "Can you folks imagine what would happen in Italy if Berlusconi is gone?" - Well, we are seeing a total uncontrollable havoc in EZ today.
Due to this, EUR/USD has cratered to the bottom of its 260 pip range. As the matter of fact, it broke it and is backtesting from below as I type. There is also a broken 160 pip channel extension. Watch a rejection in 1.36 area and a trip to 1.3450 - 1.3350 or so.
BTW, on this EUR and SPX weakness, AUD/USD is now below its 240 pip range as well. So keep your eyes on the possible AUD range extension, it backtested and got rejected, (just like EUR).
With all of this, why is gold not flying to the moon? Your guess is as good as mine. 1800 is a major psychological level, but I see no major technical resistance here. I am not doing anything with it, too complicated above 1775 (which was my target from Oct 25th). Could just be a short-term consolidation and "treasure stop hunt" before yet another move to 1840 or so. Watching...
And finally, oil. I have been quiet about it lately. Very frankly, I am dumbfounded why it is up here @ $97 on WTI. I am not arguing with market. I am the one who said earlier in the year that "geopolitics will come to forefront" sometime later in the year. This could be the only time I do not want to be right.
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