Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Versus Bitcoin: The Pro-Gold Argument Takes Shape
By: John Rubino

Gold's Interesting Day
By: Rick Ackerman

Asian Metals Market Update: November-20-2017
By: Chintan Karnani, Insignia Consultants

GoldSeek.com Radio: John Williams and Louis Navellier, and your host Chris Waltzek
By: radio.GoldSeek.com

Gold Market Update
By: Clive Maund

Technical Scoop - Weekend Update Nov 19
By: David Chapman

Zero Hedge invites Financial Times to heed GATA's urging on gold suppression
By: Chris Powell

The Great Retirement Con
By: Adam Taggart

Perspective on the Gold/Oil Ratio, Macro Fundamentals and a Gold Sector Bottom
By: Gary Tanashian

Global Silver Investment Demand Maybe Down, But Still Double Pre-2008 Market Crash Level
By: Steve St. Angelo

 
Search

GoldSeek Web

 
Test of Strength


 -- Published: Monday, 26 January 2015 | Print  | Disqus 

By Bob Loukas

Until the ECB announcement of Ä1 trillion in QE, the equity markets were struggling to maintain their upside, near-vertical trajectory. The equity market Cycles seemed to have recently changed in character, and were at serious risk of rolling over and failing. And a failure at this point in the Investor Cycle, after such a massive and speculative bull market, would open the door to a significant decline and possibly even signal that the current great bull market was finally over.

But the ECB changed the game. It stepped on to the track and cleanly took the QE baton from the FED. At Ä60 billion per month until September 2016, the stimulus is massive, and we canít discount the possibility that it will drive world markets higher until then. Since similarly-sized FED QE programs were credited with driving world equity markets higher, I see no reason why the ECBís action will have a different outcome.

But, as stated many times before, eventually fundamentals always matter. And in this case, the action by the ECB, although significant, may be too late. With bond yields across Europe dipping into negative territory, my fear is that Europe may be already locked into a powerful deflationary cycle that is impossible to exit.

This idea brings us to the current Daily Cycle, and the importance of the ďtestĒ for equities that Iíve outlined recently. I made it clear last week that, regardless of the long term Cycle implications, I expected a rally in equities. And thatís what we got. The market has risen to the 2,060 area, the most likely point for a change in long term trend to present itself. The current DC is on Day 27, but the market has yet to exceed the high set on Day 8. If the market is topping, its current position is exactly where I would expect the rally to stall and fail as price turns lower.

So, this is it! I believe the longer term trend is coming down to the action over a handful of days! If, on the back of a Ä1 trillion QE program, the market cannot rally 45 points to a new all-time high, there is nothing that can save it. And if the market turns lower from here, it will print a Left Translated Daily Cycle (DC), and is likely to face a terrible and rapid sell-off. As Iíve been saying for some weeks, itís up to the bulls to prove they want to keep the current rally alive.

1-24 equities dailyI believe that all the important moves will present themselves on the Daily Chart Ė the weekly chart (below) offers no additional insight. If we see a new all-time high in the coming weeks, it will negate the recent bearish behavior and open the possibility of another 200-300 point rally.

The weakness in the 2nd DC is evident on the weekly chart, with the market repeatedly testing the 26 week moving average support. In the past price would typically just bounce off the 26 wma and move higher, but this time the 26 wma is acting as resistance that could potentially give way. If the market fails to make new ATHís, we will point to the current developments as evidence that the market was topping.

It should not be lost on anyone that this is the same analysis I presented in the Gold Cycle, but on the other side of the equation. The trend for equities is up, so we should expect a continuation. But as with Gold, thereís a lot of evidence that suggests that the long term trend might be changing. More importantly, we should see the potential for long term Gold and equity market trend changes as symbiotic. Equity market weakness and Gold relative strength are inextricably linked.

1-24 Equities Weekly


| Digg This Article
 -- Published: Monday, 26 January 2015 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.