correction over pt 2... with charts...

I said that I would post some charts when I get a chance. I don't have access to my charting software, so stockcharts.com will have to do. Looking at the SPY, it's sitting around critical support, ascending purple trendline with double turquoise lines for support. Oil (USO) is sitting on support (ascending black trendline along with 200 DMA). Gold appears to have broken it's ascending turquoise trendline, yet is sitting on red line support of 106. and the US dollar (UUP) is sitting around 23.3 resistance (turquoise line), along with massive overhead resistance of the 200 DMA at 23.4.

So again what do I think? while anything is possible, I would say it's likely safe that commodities and stocks are trading at a stable support level, and that the US dollar is at massive resistance. So given that I think that the US dollar should fall, that should bode well for commodities and commodity related stocks.

Of course it is also possible (but less likely) that the US dollar will continue its rally, and then all bets are off and we are in for a more sizable correction. But personally I think we're probably at least a few months away from a large scale correction, because the powers that be (eg the US gov't) will throw all the money they can print at the financial mess to try to preserve a false sence of economic recovery. When people realize that printed money is not a prescription to the world's problems that's when we'll have dire consequences, but I don't think we're there yet.

long story short, I think it's a good time to accumulate some gold.

correction over?

I'll try to post some charts later. But anyways if you chart Gold, and the S&P 500, you'll find that they are ho vering about a major support area. (GLD- 107.xx, SPY - 109.XX). In fact gold seems to be forming a double bottom. You will also find that the US dollar is hovering around resistance (23.xx on the UUP).

So what will happen next? China has been saber rattling about reducing stimulus and loans, which is the cause of the recent correction. Even Obama's threat to Wall St. about closing the ability of banks to run hedge funds is likely just a farce for show, since the US government has already been bought out by the major big US banks. But what will the US government continue do? They will naturally continue to print money. So baring any major event that will upset the market (eg. terrorist attack, blah, blah), it's likely that the US dollar will see its high recent highs. So if the US dollar declines from now that will likely bode well for gold, and other commodities. Anything can happen but I say that it's likely a good entry point to get in commodities.