still the same holding pattern. be patient

It has been a rather frustrating market for those who invest based on common sense. Greece is in trouble, Portugal is next, America continues to print money, investors in gold and oil have to suffer through violent swings in price because the US dollar rallies, and yet the US stock market is happily rallying even though the economy is probably on life support.

As much as I'd hate to say it, but being long US stocks has been good. While I'm not saying to buy right now because we are really toppy, it's also not yet a reason to sell either. I would say that this moment in time, it would be safest to be a "skeptical bull". Eg. go long when opportunities present itself, but be ready to alter your views from bullish to bearish almost immediately.

Anyways click on the charts, and look at the comments there. The SPY is toppy now, long overdue for a pullback, but I wouldn't count on one occuring until I see it. GLD looks like it has a head and shoulders formation which is bearish, making a possible move to 103 a logical. But if this head and shoulders formation fails and manages to take up lots of resistance, then I'd say that the gold bull will continue, as it eventually should with all that money printing. GDX looks weak, but even with a correction in the stock market, and gold, will take down GDX, but based on the charts, I wouldn't bet on a steep decline. As always be flexible about oppinions. US dollar, look at the comments. But we've been experiencing a steady non violent rally in the US dollar that has been depressing oil and gold. Once the markets get past Greece and whatever country chooses to default, then the fundamentals of money printing should catch up with USD, making it decline, inflating gold and oil, and leading to a repeat of 2008. Remember that year? The first half of 2008 was an excellent time to be in gold and oil.

be patient before going long

The markets have been on a tear for the past 6 weeks. The markets have staged a spectacular rally without much volume. The big boys are basically doing nothing with the exception of the small propping action and make sure that the markets float higher on light volume. Once again it's the little investors who are chasing the market higher.

Well gold and oil appear to be at a resistance point (look at the charts), the SPY is extremely lofty. And the US dollar (UUP) well it's either topping, or there will be one final blow off higher before all that printing catches up with the fundamentals, and the USD starts it's long term decline again.

I highly doubt the big boys will not be playing some game in the very near future to shake people out, just like they did in late January, and likely what they will do in the very near future. After all they have to sell their options to dumb people and make them expire worthless. They have to sell their shares at high prices to dumb people , and buy it back from them at low prices. (Dumb is a relative term, I don't mean to offend anyone). CNBC, Marketwatch is all vouching for the stock market and how there are good buys everywhere... (is that a forshadow for topping activity?)

I don't doubt that the SPY can reach 125 within the first half of this year. Gold will be rallying, and so will oil. Guess what happened in 2008 when oil rallied to $147?? Well oil is now at $80, and if the markets continue to rally, guess what will fuel that rally? Oil itself... and guess what will happen at the end of the rally? I'll give you a hint... consumers will not be very happy with high gasoline prices. And that's when Ben's printing will catch up and make things that were suppose to happen to the economy a reality.

mid term bull, but what will happen Monday?

So whether you share my views that we are going to have the great depression 2 or not within this decade, you got to believe that in the mid term the bull is going to continue with all that printed money sloshing around. But will happen on Monday, and what will dictate market action in the short term?

Well look at the chart in the SPY, and look at the commentary in the picture. The SPY opened at the high of the day, and closed significantly lower than the opening high. In the past when that happened, what did the market do? It happened in early January and we got a correction that lasted a month. It happened in mid February, and the market pulled back a bit before making the most recent highs. So what will happen next? Well certainly the chances are good that Monday will mark a pullback, and where will the pullback lead, if this pullback does transpire?

Well lets look at the chart of gold. GLD has recently broken below a descending turquoise trendline. What is the US dollar doing? Well the chart of UUP either shows a topping pattern, or bullish consolidation. Since the market is really overdue for a correction, I would say that there's a good chance that the dollar will rally just a bit more to cause a much needed correction in the market, and continued declines in commodities, before the mother of all rallies happens in the markets and commodities like gold.

Again, stops are required to play this game.

bullish stampede

Well I know a few weeks ago I said to keep a close watch for GS at 160 resistance level for possible signs of a rollover, and thus the broader market will take a dive. I also mentioned to be on the lookout for a possible "reverse the reversal" for a move higher. Well it appears that we have done the reverse the reversal, and GS has blown by the 160 resistance to the upside.

If you take a look at the SPY chart, from the commentary, you will see two arrows one pointing to early February, and one pointing to late February. The "reverse the reversal" came in late February, and a common thing is that the market tried to sell off significantly, only for buyers to come in later in the day to either push the market to positive, or significantly higher than the days lows. These type of days also come with high volume, and therefore days like those usually tell that the market is ready to rally, and that does turn out to be the case. Also the US dollar looks very tired, and appears to be ready to roll over and die any day, thus supporting higher stock and commodity prices.

So now what? Well the market does seem short term toppy, so a minor pullback will likely be healthy to the bull market to continue. Maybe the US dollar will be able to rally just a bit more to pull the market back a bit (eg. 110.5-111.5 on the SPY) and about 108.5 on GLD. A minor will give a nice setup in which to go long, of course with appropriate stops. Because really who knows whether this minor pullback actually becomes a major crash down, or continuation to the upside. But with all that printed money around, I am more comfortable to bet on the upside.