This week….. - The #US stock markets moved to new highs this past week. However, there are numerous negative divergences present in technical indicators and sentiment indicators. The market could be moving into a blow off phase. June is typically a weak month for stocks but if the US stock market survives June then new highs are possible into July. The Cdn stock market was weak dragged down by weakness in material stocks (golds and metals). The US stock market shrugged off the poor Q1 GDP numbers and focused instead on improved consumer sentiment .. - #Bond prices rallied again but the bond market appears to be moving higher primarily because of a short squeeze. The market had felt that with the US economy improving that interest rates would rise. Instead the Q1 GDP was weaker than expected and some other numbers suggested an economy that is not particularly robust. The result was a bond squeeze. Oddly bonds are rallying for exactly the opposite reasons that stocks are rallying. This is a divergence. - #Gold broke down this past week (as did silver). But #palladium moved to new highs. The #US$ did not exactly rally this past week nor did the Euro fall despite expectations that the #ECB might cut interest rates into negative territory and provide more stimulus. Gold was perceived to have lost its safe haven status given the successful Ukraine election and a supposed easing of tensions in the east. Fighting continues in the east Ukraine and it was reported that upwards of 1,200 were killed including a Ukraine General. The drop in gold prices appears to technical and could project at minimum down to $1,220/$1,225. However, if that level were to fall and especially under $1,200 then a decline to test the June and December 2013 lows would be underway. Triple bottoms are rare and with numerous bearish reports for gold out there it is possible to fall further. - #Oil prices fell as supplies came in higher than expected and tensions supposedly eased in Ukraine. A break under $100 could send oil prices back towards $92 once again.
Posted on: Sun, 01 Jun 2014 23:15:50 +0000
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