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.

$SLV breaks support level

Silver $SLV broke support level at $25.80. Gold still above its support level. Let's see what happens in the next couple days. If GLD breaks support level at $148.00, I am selling GLD.

BBC News - Spain formally requests a bailout for its banks

BBC News - Spain formally requests a bailout for its banks:

'via Blog this'

S&P key levels

The S&P has bounced from its short term lows to its 61.8% fib ratio and retraced back to the 38.2% level. From here if the S&P breaks below 1290, we can see further weakness. On the upside, a close above 1345 can mean the continuation of a rally to the 1400 level

great interview with Jeremey Grantham

In 2010, Jeremey Grantham gave Maria Bartimoro an interview. In this great interview, Jeremey Grantham talks about FED and the investing environment for the next few years. I happen to agree with Mr. Grantham in most of his opinions.

GLD breaks up from trading area - probabble new uptrend

$GLD reached and bouncing off support level

Buying opportunity before a short time rally. Also $GLD broke the recent positive correlation with the equities market.

BBC News - What will happen if Greece leaves the eurozone?

BBC News - What will happen if Greece leaves the eurozone?:

'via Blog this'

IWM near breaking neckline.

IWM near breaking neckline.

Europe and Spain becoming a problem

Starting with Greece and France, we are likely to see a shift to the left and an anti-austerity mood. Spain is  likely to be the next big problem. Spain is too big to fail and too big to bailout.

The world has made a turn

The world has made a turn. A turn that we should pay attention to. The crises in Europe is here to stay; and it will stay for awhile.

Voters are tired to short term pains for long term gains. Unemployment is at a 15 year high. 11 countries are in recession. All the markets have room to fall further. 2012 is starting to look like 2008. But this time, it is not the subprime mortgage loans. It is countries not being paying their loans.

We are experiencing nevers seen problems - at least at these levels.

Deflationary forces are setting in. The risk of the United States to follow Japan's footsteps is increasing.

DOW key support at 12270. Anything below is bearish.

Interest rates are likely to remain low. US dollar likely to feel the pressure of low interest rates. [aden]. 3.20% is a key level on the 30 year US bond. The rate staying below 3.20% signals the likelyhood of long term interest rates.

The US dollar has been falling for most of the last 40 years. The trend is likely to continue as a consequence of continued goverment deficits and money creation policies. However for as long as the US dollar index remains about 77.80, the US dollar will continue to be a viable option to hold cash position.

June has been a seasonally low month for the price of gold. Recently, gold broke the 65 week moving average - a key trend following indicator for gold. The December 2011 low is a key resistance level for gold. A break below this level signals that a further decline is likely.