- the first year anniversary of the Lehman Brothers demise coincided with many global stock markets reaching fresh peaks for the year. S&P500 closed at a record 1068.3 this week: when will it stop?
- gold price has gone above $1000 per oz (important psychological level): see my next post to see the chart analysis- US dollar index is crashing: fell below its support of 78, heading now towards the critical support of 72 (see chart)
- USA declared a trade war to is its most important creditor, China- Natural gas finally rebounded in a serious way: is it the start of a reversal of the downtrend that has been going on since mid 2008? (see chart)
- insider sales have reached the highest level seen for long, causing many to question the continued increase of the S&P500 index- Shanghai index finished the week below 3000, failing to rise above the 50 day moving average (see chart)
- BRIC countries (Brazil, Russia, India and China) and international organizations increasingly calling for a new currency to replace the US dollar
- China issuing sovereign bonds denominated in Yuan currency (renminbi) to offshore investors for the first time
- International Monetary Fund announcing sale of 1/8 of its gold reserves. What will be the impact on the price of gold the coming week?
- Renewed concerns on the banking sector: Lloyd's bank in UK failed in the stress tests imposed by the Financial Services Authority; number of bank bankruptcies increasing in the USA and the concern that the FDIC would not have enough reserves to intervene in case of need; problem loans in the commercial real estate sector in the US, option ARM loans in US: next time bomb?
- Joseph Stiglitz wrote that "For all Obama's talk of overhaul, the US has failed to wind in Wall Street" and that "with a blank cheque from taxpayers and no real reform the perverse incentives for risk-taking are bigger than ever"
What will I focus on next week?
1) gold price: curious to see if price will stay above $1000 after IMF declaration that they will sell 1/8 of their reserves (my gut feeling is that it will go up)
2) USD index: I expect a possible rebound (but on a long-term basis I am very bearish on this currency)
3) S&P500: expecting a pull back
4) EUR/USD: expecting a pull back to around 1.46, which might be a good opportunity to reenter in a long position
5) Shanghai index: will it go above 3000 again?
I agree with you under normal fair conditions. There is the possibility that the IMF could artificially sell some gold for much lower prices, which would drive the gold price down temporarily, shaking out the weak hands. I would say if it happens, view it as a buying opportunity.
ReplyDeletevintage
I agree with you under normal fair conditions. There is the possibility that the IMF could artificially sell some gold for much lower prices, which would drive the gold price down temporarily, shaking out the weak hands. I would say if it happens, view it as a buying opportunity.
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