Market-Technicals

Financial Market Analysis

By Shawn R. Carpenter

Friday, January 09, 2009
  What are we waiting for? Gold?

I am still bullish on Gold for numerous reasons. First off, technicals still look great! Recent price action in gold suggests we are potentially looking for higher prices in the near future. A break of the 898 and 915 levels will produce a big buy signal. For a short term safe play, 932 and 982.50 would be good target levels. In the medium term, I would look for a break of the 1020 mark.
Also, I do not see any significant follow through in this rally to justify buying for the medium term. I think smart money is waiting for a few things:
  1. Obama to take office...
  2. Size of Obama's stimulus package
  3. Fundamentals still are not there.... We will see more downside with deflation upon us. With people trying to justify the S&P 500 earnings trading at 15 times earnings.. I still do not think we are in calm waters. For one thing, credit markets are STILL FROZEN!
  4. Some sort of transparency on the Treasuries Books. Bloomberg, Reuters, CNBC.. and others have tried to get access to this stuff.. but have been denied by the feds. Not sure if they are waiting for the new Administration to take over to provide some direction with the TARP, but we are currently looking at over 50% of GDP being used for a bailout. What is the Government holding? How long will the rest of the world finance this (through bond purchases)?
We are going to see a few quarters of really rough numbers from both the corporate earnings side as well as the economic side. The key thing to watch here is how the market reacts to the numbers. So far, not too good. Yet now is not really a good gauge to test market reaction, as everyone is waiting for Obama to provide some guidance.
While I am not posting every idea I have on this blog... I have seen some pretty interesting opportunities present themselves. Good luck and keep an eye out for the patterns!
  11:21:00 PM
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Market-Technicals is a Financial Market Trend and Research blog. Mainly utilizing technical analysis, the research composed is designed to capture market timing techniques, understanding how economic and political forces shape the market, and give speculation as to where the financial market is headed. Encompasing equities, index, sector, ETFs, commodities, and bonds; the expectations are to shed some light as to what "smart money" is thinking.
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