09.04
Despite my bullish overall outlook, I went into yesterday looking for potential shorts in the DAX and FTSE. However, these two indices enjoyed a very decent day of buying. The FTSE’s surge took place in more or less the timeframe suggested by the 25-day cycle that I discussed in yesterday morning’s note. Ideally, the gains would have stronger still, but I have to give this move the benefit of the doubt for now.
The accompanying chart shows just how much scope the DAX has to rally. The German index is still in the lower channel of its rising regression channel since early June. You can easily see where the last few highs have occurred during this period, and hence have a good idea of where the next one is likely. As long as the DAX and FTSE don’t retreat too far today, I shall buy into a further bounce.
COMMODITIES OUTLOOK
11.05
The strong Euro/weak commodities puzzle remains. Something is going to have to give here, and I reckon it will happen in the form of commodities playing catch-up. The scene is well set for a Q4 rally in risky assets, driven by ample central-bank liquidity measures. I see gold and silver as likely to lead the charge, as I outlined in my soon-to-be-posted webinar held last night.
I also discuss the outlook for gold in this new video with John Piper, recorded yesterday: http://bit.ly/RAhjSi
for analysis of some leading commodities.WALL STREET OUTLOOK
13.51
I said yesterday that I’d switch back to outright bullishness if the rally continued for a second day. It did and I have. As I have argued for some time, this bull market is alive and kicking. The US indices have been strong all this year, and I am expecting plenty more as the present quarter progresses. There was another little piece of good news this morning in the form of the latest Investors Intelligence report. Bulls are down and bears are up, with the gap between the two therefore narrowing to 16%, compared to a high of 29.7% last month. Big rallies start out amidst scepticism.
I am looking to buy bounces from small intraday dips.
for analysis of the Wall Street indices.
