04/02/10: There is little change to the broader commodity markets as we head into the Easter holiday weekend. Equities continue to rise, bond markets look weak and the US dollar continues its dead-cat-bounce. Industrial metals are outperforming precious, crude continues to dominate over Nat. gas and the meats continue to outperform the grains (where Corn has now joined the bearish camp). Most notable this week, the Japanese Yen has broken down in earnest (refer to this weeks CTS for more on that)...
Japanese Yen: This currency (along with many others) has been on a wild ride against the US dollar over the past few years. First it lost almost 20% of its value then turned around and appreciated more than 40%. One may even argue it has acted as more of a 'safe haven' than the greenback. Notice how the Yen bottomed at almost the exact time the S&P 500 topped out. Has this violent move higher played itself out?
From a monthly perspective (chart on right) we see that the current 50% level and the highs from late 2004 sit around the .985 area. I would be willing to bet there will be a fair amount of support at or near that level (or another .07 lower to go).
From a weekly perspective (chart on left) we see that over the past two weeks the market has confirmed a massive double top price patten. Prices have not only established a new weekly downtrend but have also broken through the uptrend governing this entire bull run.
Something significant is happening here people! Keep in mind, the gold market has been trending lower for 10 weeks, the US Dollar index has been trending higher for 11 weeks and the Eurodollar (that is the corporate US short term interest rate market) has been trending lower for 7 weeks. The market knows something...will any in the broader media catch it? only time will tell, but my hunch is no...
That's all for this issue of the CTS Spotlight,
Brian Beamish FCSI
the_rational_investor@yahoo.com
http://www.the-rational-investor.com
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