market summary

Gold: bullish outlook. adding GLD if breaks above $158

Silver: bullish outlook. SLV above 30 day MA - adding

Oil: bullish - adding

Stocks: looking good. recovering from lows. pullback is due - not adding

Mexico: bullish - adding EWW if breaks above $63.85

Interest rates: 30 year at 2.71%. TLT pulled back - not adding yet

Currency: dollar looks like topping out in the short term.

Increasing odds that we are near of a third wave down

We are reaching levels where the odds are increasing for the beginning of a third wave down.
Alphapig stock portfolio is 100% hedged at the moment. If the third wave down fails to materialize in the next couple days to a week, I re-evaluate.

FT Alphaville » Moody’s cuts Italy two notches

FT Alphaville » Moody’s cuts Italy two notches:

'via Blog this'

German Constitutional Court can delay #ESM #euro

The delay in the German Constitutional Court decision on the involvement of Germany in the ESM is jeopardizing the short term stability in the Euro zone. The court has indicated that it could take up to three months to decide.

German Review of Press Commentaries on Constitutional Court Hearing - SPIEGEL ONLINE:

'via Blog this'

Odds of a deep correction or even a crash are increasing.

The stock market is correcting from recent overbought levels. Remains to see whether we are experiencing a short term correction or a the beginning of a new leg of a much deeper correction.

Despite the recent developments in Europe to recapitalize banks with funds from the ESM and the agreement to create an ECB oversight board, a long term solution to solve the growing debt has not been found. 

Today the Euro hit a two year low against the dollar. The decline of the Euro is a long term trend that is likely to continue.

The European debt crisis and the anemic economic growth worldwide continue to be high risks. Odds of a deep correction or even a crash are increasing.

At this time, the prudent investor should hedge its stock equity holdings to have a stock market neutral position.


Bond prices appear to be expensive. We are likely to see a decline. However, the long term trend for bonds continues to rise.


Gold appears to be bottoming. However if it breaks below 1548, we could see a further decline.  If this happens, I would be selling the gold position.

Market at extreme overbought levels based on McClellan Oscilator

Market overbought $NYMO McClellan Osc.