As we begin the week on increase turmoil between the Ukraine and Russia(RSX, quote) energy traders are seeing the highest crude oil prices since September of last year as producers are fear political driven supply disruption.
Gold’s recent bullish momentum appears to be holding firm for the time being, and indeed February has been a positive month with only minor pullbacks and reversals denting the move higher.
One of the best barometer’s of market sentiment is the NQ (e-mini future for the NASDAQ), and whilst many analysts were forecasting market meltdown the NQ was quietly reversing and clearly signalling a short term reversal. The bears, once again, have been sent smartly back to their caves!
As I have written many times before it has been a torrid time for gold bugs, who have seen the precious metal collapse from the dizzy heights of almost $2000 per ounce to plumb the lows of $1200 per ounce.
Looks like the markets just about managed to avoid a mauling by the bears, who have now temporarily retreated to lick their wounds!
The first FOMC meeting this week is an historic one for many reasons. First it is the last time Ben Bernanke will chair the meeting. Second, for the first time in the FED’s history the Chair will be held by a woman, and third with several new members the voting pattern will be scrutinised very closely by the markets.
In writing any market analysis, I am always conscious of two things. First, it is very easy to forget that the associated buying and selling in any market embraces the full spectrum, from long term investor, to the short term speculator.
The warning flags of potential short term weakness have been flying for some time on the Dow Jones cash index, and the associated derivative E-mini YM futures contract.
‘Wind down’ is not withdrawal but watch negative news flow in the US; treading water is not growth so keep the champagne on ice for Europe; price is not value so beware investor sentiment; falling unemployment is not rising employment so watch the participation rate; and a hiccup is not a correction so keep an eye on an exit…
The room’s getting crowded, the party’s been going on a while but more people could arrive. Just beware fair weather friends and a sign it could be time to think about leaving…
