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.