As I discuss in this week’s main column, QE-driven rallies in equities typically start with a bang. However, the latest recoveries in the DAX and FTSE have so far been more whimper-like. The move off the lows has lacked genuine thrust, which needs to change pretty sharpish. Weaker rallies tend to be counter-trend affairs, so it is possible that there is more downside to come here, before we get the larger move upwards that I have been calling for. For now, my preference is for the US indices that have shown slightly more impetus in yesterday’s trade.
for analysis of some leading equity indices.COMMODITIES OUTLOOK
11.07
There is a cycle of around 34 weeks’ duration in the price of gold. This cycle has helped identify many of the major highs and lows in the yellow metal over the last few years, most notably the record peak of September and the subsequent low in December. Just lately, the price broke higher as the cycle was troughing. This rhythm is suggestive of ongoing gains throughout the fourth quarter of 2012. This is in line with the message of other technical indicators for this market, and with my fundamental views on gold. I am currently looking for intraday buying opportunities.
WALL STREET OUTLOOK
13.08
I am not yet wholly convinced by the rally that began on Wall Street yesterday. On the plus side, the Nasdaq led the way, and in decisive fashion. The S&P and Dow looked rather more feeble, however. The move has run into resistance at the 55-fourhourly EMAs. Only a blast through here will be enough to dispel my doubts.
A longer-lasting correction is a possibility, according to one of Wall Street’s most important cycles. The 38.5-day cycle highlights a turning-date around 15 October. I would frankly be surprised, however, if the present shakeout lasted that long. I think it far more likely that that date plays host to another minor top than a bottom.
for analysis of the US indices.
