CTS Spotlight for the week of September 24th, 2010

Hello and welcome back to CRI's CTS Spotlight



09/24/10: The US Dollar Index has broken down in earnest as the Euro has finally bottomed. Stocks and commodities are moving higher aggressively within the vacuum that seems to be persisting ahead of the mid-term US congressional elections expected this November. In a similar fashion to the 2008 elections the market is moving into the event. Unfortunately this may mean that once the event has happened many of the currently trending markets may reverse. Having said that, 'make hay while the sun is shining' seems an appropriate stance. Grains, metals and softs are all moving higher so enjoy the ride while it lasts or just be short the US dollar index. Either way, there is money to be made.

US Dollar Index

The US dollar index has been in a significant trend channel between the Bush lows (70.80 fr March 2008) and the Obama reaction highs (89.71 March 2009) for the past three years. Typically Democrat US governments are US dollar bullish. Indeed, since the transition the US dollar has done better. The problem for the bulls, we are currently within a 17.5 year US dollar bear cycle in which we are about 10 years in. This means we should be expecting the US dollar to be heading lower for at least another 5 years but probably closer to 7.

Given the fact that the Republicans are threatening to take back control of Congress this November, it shouldn't surprise to see the market price that potential event into the marketplace. If the currently weekly breakdown is indeed correct, one ought to expect this tentative uptrend line (refer to monthly chart on right) to be tested in earnest.

From a global growth perspective, If the world is feeling like the credit crunch of just a few years ago is over, then one can make the argument for stronger world currencies vs. the greenback and higher commodity prices (which would be exacerbated by a falling US dollar as well).

Regardless of your macro perspective one should either be long commodities or short the US dollar on this major breakdown. The metals have been pointing higher for some time here. Similarly, grain prices and soft prices are moving higher in earnest as well. Lastly, stocks themselves are pointing higher too. There is a lot to choose from so enjoy the rally while it lasts.

Once on the other side of the election.....all bets are off!!!

That's all for this issue of the CTS Spotlight,
Brian Beamish FCSI
the_rational_investor@yahoo.com
http://www.the-rational-investor.com

CTS Spotlight for the week of September 10th, 2010

Hello and welcome back to CRI's CTS Spotlight



09/17/10: While the currencies of the world hang in limbo ahead of the upcoming US congressional elections, the world stock markets are slowly working higher (this week saw the S&P 500 breakout) amid a world that is convinced rates are going to stay low for some while yet. Commodity prices are rising generally too with notable bullishness in the grains and metals. Regardless of the price action, I would be very reluctant to put on any new money of significance ahead of the November elections. Having said that, a coat-tail trade into the election isn't a bad idea but that is all that it should be seen as and nothing more. Gold looks especially appealing with its recent breakout through $1250. A move over the next couple weeks into the low $1400s wouldn't be a big surprise as it has been our target for 18 weeks now.

As per the most recent S&P 500 blog entry and previous posts here, many of the world's stock markets are moving higher. So much so that double bottoms have been regeistered and upside targets identified.

While I am cautiously optimistic for the market heading into the election (and the potential honey moon period into X-mass '10. I am rather pessimistic for the market after that event. If you are to be long then use the above listed reference points as a barometer for entry and keep stops tight!

For those that must be long something, I would take a serious look at the gold chart and associated options. While I don't have a specific trade in mind, I am looking at the November $1300 calls in earnest...

That's all for this issue of the CTS Spotlight,
Brian Beamish FCSI
the_rational_investor@yahoo.com
http://www.the-rational-investor.com

CTS Spotlight for the week of September 03rd, 2010

Hello and welcome back to CRI's CTS Spotlight



09/03/10: The summer of 2010 is almost over and one can see the markets setting themselves up for the fall. While we see little movement in the currency and interest rate markets, Canadian and UK stocks have broken their respective downtrends and look like they want to test their spring highs in earnest. Considering the upcoming US Congressional elections this November, I don't see any major push lower until that event is out of the way. Elsewhere, Corn has finally broken out and registered a weekly bottom pattern. A few weeks ago we mussed at how long it would take for Corn to be dragged higher and now it too has finally turned the proverbial bearish corner. Refer to this weeks CTS spotlight for more on this. As well, for those OnlyDoubles subscribers out there, you should have put your latest position on (there is a hint at what the trade is in that sentence)....


Corn: I have included the chart above. To mix things up a bit this week. I have put the commentary on the chart itself. Offer feedback if you would like....

That's all for this issue of the CTS Spotlight,
Brian Beamish FCSI
the_rational_investor@yahoo.com
http://www.the-rational-investor.com

p.s. OnlyDoubles subscribers enjoyed taking profits on yet another OD trade! go here for more info...