Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your 1 p.m. market update for Monday, the 19th of September.
I want a divorce…
Perhaps this is a little bit of a teaser headline, but the reality is Angela Merkel, the German chancellor, must be thinking that she would love a divorce from these other euro countries. Politically, it would solve a great many problems for her.
Here you have Germany, who is Europe's economic powerhouse, being pulled down by the likes of Greece, Spain, Portugal and Ireland. If you were in Angela Merkel's shoes right now, wouldn't you want to divorce these countries?
Now the politicians can't blame this one on the banks. They were the ones that overspent, they were the ones who recklessly put programs into place that just cost too much money. So there you have it! It's not the banks, it is the politicians who are the problem...
Does anybody believe that Greece is going to pay back what they owe? Their debt now stands at 165% of GDP. There is no way that Greece can get themselves out of this. Will Ireland, Spain, and Portugal be able to hold on if Greece goes under?
Lastly, everyone loved the market on the upside last week. Today that sentiment has changed as the problems in Europe are once again in the forefront of every investors mind. Europe is the tail that is wagging the world economy.
Now, let's go to the 6 major markets we track every day and see how we can create and maintain your wealth in 2011.
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S&P 500
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 60
As we mentioned on Friday, we thought the current rally in the S&P 500 had pretty much run its course. The action today sort of confirms that with a very negative pullback. I expect we will see this market on the defensive for the balance of the week. With a Chart Analysis Score of + 60 it would indicate that we are in a trading range. The Williams % R and the Donchian channels should be used in this type of environment. Long-term traders should continue to be short or be out of the market completely, and in a cash position. Intermediate term traders should be on the sidelines waiting for either a buy, or sell signal based on our Trade Triangle technology.
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SILVER (SPOT)
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 70
The spot silver market is currently in an oversold condition. Our intermediate weekly Trade Triangle turned negative today at $39.29, indicating that intermediate term traders should be on the sidelines at the moment. With spot silver in an oversold condition and at the lower range of the Donchian trading channel, we expect to see some support coming into this market. Cyclically, we are close to a low cycle and would not be surprised to see a market bounce in the next several days. We want to continue to monitor this market over the next few days looking for an area to add to long positions. Long term traders should maintain long positions in this market with appropriate stops. Intermediate term traders should now be on the sidelines waiting for either a buy, or sell signal based on our Trade Triangle technology.
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GOLD (SPOT)
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = + 55
The gold bulls have to be disappointed with today's market action even though the longer-term trend for gold remains positive. We still believe that the $1,750 area is important support for spot gold. Providing that our monthly and weekly Trade Triangles remain intact, we want to approach this market from the long side. The Williams % R is once again in an oversold condition. The $1,840 level is resistance for gold at the moment. Support comes in around the $1,775 and extends all the way down to $1,750. Intermediate and long-term traders should maintain long positions with the appropriate money management stops in place.
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CRUDE OIL (OCTOBER)
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 75
The October crude oil contract was immediately on the defensive when it opened today and moved down to the key $85.00 support level. This is a very important area for this market and we would view a close below $85.00 as a very negative sign for crude oil. This would break a support trendline that began on August 9th. We do not think that the crude oil market is ready to go higher, based on our long-term monthly Trade Triangle which remains negative. The $90 a barrel resistance continues to stop this market on the upside. Look for crude oil to continue to move in a sideways to lower manner.
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DOLLAR INDEX
Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 90
With all of our Trade Triangles in a positive position we remain in a steadfastly bullish trend on the Dollar Index. Our daily Trade Triangle turned positive today at 77.22. Longer-term this market looks poised to move much higher. This index is coming from a large energy field that is capable of carrying it much higher, possibly up to the 80.00 - 81-00 area. Short, Intermediate and Long-Term traders should maintain long positions with the appropriate money management stops in place.
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REUTERS/JEFFERIES CRB COMMODITY INDEX
Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 100
We have been looking for this index to move down to the 326 level, which is a Fibonacci retracement of 61.8%. This happened today, as the Reuters/Jefferies CRB Commodity Index pushed down to an intra-day low of 323.13. Our intermediate term weekly Trade Triangle turned red today at 329.4. With all of our Trade Triangles in a negative position we expect this index, while oversold and just outside of the Donchian trade channel, to remain on the defensive. We would not rule out a bounce from current levels. Short, Intermediate and Long-Term traders should maintain short positions with the appropriate money management stops in place.
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As always, we rely on our market proven Trade Triangle technology for catching the big moves.
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This is Adam Hewison for MarketClub and I’ll see you tomorrow, right here with my weekend wrap. Have a great trading day.
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub
ADAM; IF YOU ARE A CHRISTAIN THEN, DEVORCE IS TOTALLY PROHABETED...THEREFORE,THE EEC COUNTRIES U HAVE MENTIONED WHERE THEIR MARRAGE IS FOR GOOD AS EVER.THANKS JESUS.
IT HAS BEEN/IS ALL ENGINEERED BY THE CRIMINAL ROTHSCHILD CARTEL.
GET RID OF THESE DEVIL WORSHIPPERS AND WE WILL FINALLY HAVE PEACE AND REAL FREEDOM IN THIS WORLD AGAIN.
It’s not simply the politicians’ fault – the bankers are more than complicit. The “Old Lady of Threadneedle Street” (Bank of England) was founded in 1694 as the second central bank (the Dutch were first). The prospective Central Banker approached the King of England with a deal: Give me the exclusive right to counterfeit (print money in the form of bank notes with nothing to back them); let me collect interest on them; force your subjects to use them as legal tender… and you will have a new supply of money in addition to your gold and silver coins that you can use for whatever political purpose suits you. The king accepted, and we have seen this unholy alliance grow to engulf every nation’s economy except Andorra and Monaco. This is what Ron Paul has steadfastly opposed (End the Fed), as did Thomas Jefferson and Abraham Lincoln. The only US President to beat them was Andrew Jackson, who abolished the US central bank and paid off the national debt (while surviving five assassination attempts).
The central banking cartel’s primary purpose is to protect the large private banks (they own the central banks) – hence the repeated bailouts here and in Europe. No one is bailing out Greece or Ireland – they are bailing out bond holders (big European banks) who hold Greek and Irish bonds. Joe Wine-Cooler in Europe has figured this out and is opposed to the bailouts (just like Joe Six-Pack in the US opposed TARP). The politicians aren’t listening to Joe; they are doing what their puppet masters at the banks (who have bought both parties) tell them to do.
The banks are also clearly at fault for making bad loans – accepting the notion that sovereign debt was bulletproof. If a banker loans money to someone (or some country) that is a bad credit risk, the bank should not get paid back when they default. Taxpayers should not guarantee that banks get paid or pay banks when the debtor does not. This is the quintessential “moral hazard.”
If it's all the politicians' fault, why are major European banks considering writing off up to 80% of the multi-billion dollar junk bonds they've underwritten. And why are the European powers considering bailing out the banks?
My assumption is that the dollar index is inversely related to gold. We are expecting the dollar index to go higher. Does this mean that gold will stay oversold or fall further? Thanks.
Based on this photo accompanying the comment, I have to believe she is exactly right in everything she says.
Hush, and it is american who is speaking about Europe. The same things I hearin my specialization discussions quite a lot.
living in CZ, I am still sorry that we don`t have euro currency. And it is US who are to blame for all the crisis in Europe. In US all that started, and Ireland paid especially great price for that ( and they did have a strong economy, they actually do have it strong still) In Spain things are as they were before, unemployment was high there all the time, but no one paid a lot of attention those numbers. Portugal was one of the weakest economies together with Greece in eurozone from the beginning and they will struggle but most [probably will make it out. And Greece is another case, they were cheating to enter eurozone, they were cheating afterwards to make deficits into 3 % required. They should be the ones expelled, but not due to high defecits but their behavior earlier. I still don`t understand how is it possible that nobody found it out earlier.
And the banks surely are to be blamed, as they were /are interested to give the money to governments, thats how they are gettning richer.
And Merkel is not that stupid to want a divorse, after they escape leave eurozone, their economics would slow down greatly. With euro they could export everything in eurozone without any problems, that`s the one of the reasons other economies` production slowed because thaey simply could not compete with german products
I looked at DBC as a proxy for the Reuters CRB index and looked at that forming head and shoulders ( right shoulder is not complete and may not complete!). It is going to be very ugly if the neckline that is sloping downward completes and price breaks that neckline at about 26.40....the measure rule ( Edward and Magee) would put the next stop at around 23.70! Commodities may be pointing to a wave of deflation until the FED counteracts with the goodies of some sort of QE3, imo. Fed is in a bind and wants to keep commodities down but print money...in other words they want to have their cake and eat it too. I err on the side of inflation but would not be surprised by a small deflationary wave. Volume is certainly confirming Head and Shoulders at all the right places too...
Jack Van Impe, a TV evangelist, said about a two months ago that Germany would withdraw from the European. he was quoting from Ezekiel. How about that. He wasn'r focused on the financials however. just interpretation. 2012 anyone?
One flaw with the article is that Social Security has a surplus.
Atlas does not care about people....
Greece is saved once again at 3:00 pm and 3 hours later....ruh roh!
http://i249.photobucket.com/albums/gg201/O71XV9/RuhRoh-1.jpg
I AM FAIRLY NEW TO THE SIT ALSO , I REALLY LIKE YOU OUT LOOK ON THE MARKET, IWOULD LIKE TO LEARN TO TRADE THE FOREX MARKET ANY IDEAS HOW TO GET STARTED???
Adam,
I am fairly new to your site. Would you mind telling when your S&P 500 gave a Long Term SELL/Short Signal?
Mike
The mess in Europe shoud get the attention of everyone in this country, but too many just do not get it! We will be paying dearly for the political irresponsibility in the form of hyper inflation. Remember Argentina in the ninteen eighties and ninties? Farmers there had to resort to paying for inputs the same day they sold crops! We already are seeing corn and beans two to three times they were five years ago, and buyers are supporting these high prices when the combines are rolling. One will have to get used to handling more money and hope it does not get sifted between the fingers as bills are paid.
"Atlas Shrugged" personified....
Adam, You are exercised about debt. Here is a serious proposal.
http://www.cnn.com/2011/09/19/opinion/kotlikoff-us-debt-crisis/index.html?eref=mrss_igoogle_cnn
What do you think.
Graham
If I were in Europe, looking at the U.S., I would want a divorce, too. Does anybody think we are close to paying back what we owe? Can anybody count that high?