Friday, 6 September 2013

FREECharts.com Stocks, Gold, Bonds, Wheat & The US Dollar

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Stock, Gold, Bonds, & The DollarSeptember 6, 2013
In This Issue
The Death of the PC
September E Mini & September Bonds
December Gold & September Dollar
December Wheat

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The Death of the PC  

 

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Dear Reader,

 

Confidence and credibility are earned over a period of time. The confidence countries around the world have had in America is eroding rather rapidly on a number of fronts, Syria being the debacle de jour.

 

America has been earning and receiving confidence for a couple hundred years. Our currency and our treasuries have been the global standard since the end of WWII. Unfortunately the global leadership is being squandered by poor decisions, especially by this administration and the Federal Reserve with their financing the lunacy spending.

 

We have to look no further than what is going on in Poland to get a preview of what very well may happen here if the likes of Pelosi were to get their way and confidence in the dollar erodes much further.

 

In the event someone might not know, Poland is in the process of seizing pension assets and "converting" even equities into government debt instruments for the people's own benefit, of course, and to allow the government of Poland to shore up their balance sheets, go further in debt, and spend more. I know it sounds absolutely crazy, but the leadership in America, such as it is, has floated the same idea more than once to plant the seeds in the minds of the public.

 

In the event there is a crisis of confidence in the global reserve currency, it will impact the entire world as it is estimated 60% of the banks around the world hold their reserves are in US dollars. This could get ugly in a hurry.

 

Mr. Putin has outfoxed Mr. Obama once again and will once again bruise him publicly. Once Barry drew his line in the sand, it was only a matter of time before Putin, via the Iranians, and their proxy Syria, used some pretty nasty weaponry. Once Barry's mouth was free of his foot, he was able to clamp down hard on the hook.

 

Unfortunately for Barry, the Russians have their own warships coming to visit the same waters our ships are in, and they invited their new pals, the Chinese. For those who are not connecting the dots yet, Barry has set in motion the Chinese military involvement in the middle east which was forecasted a few thousand years ago. Well done, Mr. President.

 

Our community organizer and part time teacher has been outsmarted by the former head of one of the 3 greatest spy networks of our time. Our president just is no match for this type of world class manipulation. I would not say he is a complete dolt, however, he is getting thrashed pretty soundly right now which may force his pride to do something real Americans will have to pick up the tab for.

 

In the event our guy issues the order, we all better be ready for much higher oil prices and terrible weapons in the hands of not only crazyies, but now really angry crazies. Even the head of the Joint Chiefs of Staff says this will be a debacle. Politicians who sit in DC think he is wrong, but let's face it, they are not the ones who would be initially in harms way, although they should be.

 

Russia and China have the ability to damage our economy now that "someone" has slipped their head in the noose and pulled it tight. Creating such significant debt has not put us in a stronger position than before he moved on up to DC.

 

My point to this all is not just to criticize some unqaulified dimrod who through some unbelieveable misfortune for America, became president not just once, but somehow by hook or by crook, a second time.

 

What happens in the near future is extremely important to you, your family, and the country. The confidence and credibility our nation has spent generations building is being spent foolishly and unbeknownst to you and be just yet, perhaps our qualified plans and the very currency our way of life is dependent on.

 


 

 

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 September E Mini 

 

 As you can see by the chart below, this market is still not convinced which way it wants to go although the longer term trend still remains down.

 

 

September E Mini 

 The ADX, which measures strength of a trend, whether up or down, is at 31.873 over the past ten trading periods. Still strong and down although the 9 dma is beginning to flatten. We will see early next week if this is a capitulation and the market continues to move up.

 

Today had a very wide range with ultimately almost no gain. Stochastics is still pointing up but the RSI is sideways. Ultimately, this market looks like a market looking for a reason to falter so be careful and use some tight money management.

 

The bonds, as you can see in the chart below, have moved as we thought last week.

 

 

 

September Bonds 

  Last Friday, and you can go back and check the newsletter if you save them, I thought the trend was up but was perhaps out of gast. I thought if the market went up, it would not be much before resuming it's longer term trend down. Tuesday was a big down day and was so low so fast, I did not want to jump in and attempt to catch a falling knife.

 

With the stock market a bit shakey and the dollar being exposed due to enormous debt creation, exposure to dollar risk by banks around the world, and the possibility of really annoying the Russians and the Chinese, we could see another selling of bonds to let DC know these folks are not to be trifled with. If that does not get the Washington regime's attention, then they are not even as bright as I regularly give them credit for, which just isn't much.

December Gold


With this being the first time in world history virtually the entire banking system is tied to a paper currency with absolutely no tangible backing, a ripple in the dollar could send gold through the roof. On Monday, I plan to be pricing out of the money gold calls with some time on them and the same with crude oil.

 

December Gold  

 
The trend for gold is back down and it is relatively strong. Stochastics is also down which is an indicator of the trend direction. The RSI is nearly 60 and was just recently approaching 80 which put it in the overbought territory.

 

To me, short of something happening in the middle east, 1350 area looks like a support area where one might consider getting long. The close today was at the high of the day nearly so there may be buyers slipping in there the chart is not revealing to us just yet.

 

As with all the markets these days, sound money management is the key to staying in the markets and giving yourself a fighting chance to be successful. If you really want to get long gold, one might want to look at shorter term indicators as these are set as 9 and 18 dma as well as 10 sessions on the ADX.

 

Here is a look at the US dollar. I would not find this very encouraging although we still find it over 8000. Should it break that level and remain for any length of time, I would be very cautious. A move below 7400 would be putting it in the danger zone and will likely push gold and silver significantly higher.

 

Any break below 7200 would be big trouble and below 7000 and we will all wish we had listened to the likes of Alex Jones because the sky really will be falling.

 

 

September Dollar  


By looking at the ADX, we can see the trend to the upside is weakening as the price continues to fall. The RSI indicates buyers may be hitting the exits and stochastics shows the upward trend may be ending and we may be in for some downtrend for a while.

 

If the dollar does fall, but not too far, I would expect stocks to rise, at least in the beginning phases of a dollar drop. The government can only revise numbers so many times before much if not all the investing public recognizes figures lie and liars figure.

December Wheat


I have been watching December Wheat for a couple of days. It looks to me like it wants to go up but the turn has not been completed just yet.

 

December Wheat 

Although the price has bounced, the indicators are not telling me this trend change is for real just yet so to avoid getting caught on a spike, at least as much as I can avoid the spike, I will give this another day at least.

 

You can see the ADX is weakening and the RSI as well as stochastics are pointing down. I don't feel we will see wheat below 630 but before I hop on the Wheat Train to the upside, I would like to see a stronger confirmation the price is going to go up for a while.

 

It looks like it could happen by the middle of the week and when it does, I would like to be ready to jump on board but for now, it is a wait and see.  

 

This was last week's report. As you may already know, the grains didn't do a great deal to the upside. I would continue to urge caution and tight money management.


If there is a stock or commodity you have a question about, let me know. I will try to get back to you as quickly as possible and perhaps include your question in the next commodity newsletter.

By the time I am finished doing my research, scouring charts, and writing most of these newsletters I am just about brain dead. Going back and reading them sometimes can make me cringe and sometimes laugh when I see my spelling and grammar. Neither of which have ever been my strong points. Thanks for overlooking these. 

Sincerely,

 

Robert Biggs
Robert Biggs
FREECharts.com
Disclaimer: There is substantial risk in trading futures and options on futures. Past performance is not necessarily indicative of future results. You may make money or you may lose money regardless of whether you or an industry professional manages your account.
  

 

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