Crude Oil bounce at uncommon .75 node

The .75 node is a "minor" node usually..can't be sure if this has any power or not, usually they don't...

Markets showing a little life today...

Once we clear previous price levels, new charts will be forthcoming...

Updated $GOLD chart...

Back up at the magenta trendline...

Merry Christmas and Happy New Year to everyone!

Slow markets, very weak rally in stocks...

Goes without saying, not much happening. The Bradley turn date is behind us now, and it's hard to see that it meant anything this time. Usually the Amanita site, suggests a turn will happen within something like + or - 7 trading days. We're close to leaving that window behind...

and two of the $GOLD charts...

Current U.S. Dollar index charts...

$NDX making little upward progress...

$gold heading for magenta trendlines on the 1.382 chart below.....

That's my guess...

$GOLD after the Fed action today...

Heading after all, for resistance lines overhead....

Gold sneaks up a little higher...

Maybe it's heading for the declining red trendline before it capitulates...

Closeup of $NDX chart showing detail of Friday's low on top of two levels of trendlines...

Compare with the chart posted Friday, it's the same, just closer in...
Today's low was a "higher low" and doesn't change the chart...

current USO chart...

Bottom shown at the .500 node, and resultant rally...now fundamentals have to feed it if it's to be sustained...

Note the negative divergence on CCI versus Williams %R...

This kind of negative divergence within the confines of daily Bollinger Bands are usually what you see preceding a significant drop...Note also the .604 retracement (Fibonacci retracement from last Gold rally at 936.30). Not shown, but ROC is also showing negative divergence...

I think Gold will be in a Bear market for a while yet...

Note the current logarithmic chart. the double tops are at .12177 and .12907, both around the .12500 node. With negative divergence I would expect deterioration...

A "must listen" webcast....

Please, please take the time to listen to this internet broadcast from the FinancialSense website. Everyone is so preoccupied with the paper losses in the Stock Markets,
but an even more ominous storm is coming, and as usual our politicians are flat footed...

http://www.netcastdaily.com/broadcast/fsn2008-1213-2.mp3

This is the mp3 version...

http://www.netcastdaily.com/broadcast/fsn2008-1213-2.asx

This is the Windows Media version...

Basically it's about energy. the IEA is admitting that world oil fields are now declining over 6.7% a year. This is a recent development, obscured by paper manipulation of Oil prices.. To counter this problem it will require the discovery of a Saudi Arabia every two years just to stay flat...

Hard to believe with oil crashing to $40 bucks a barrel, that high oil prices are coming back, but they are, and in the not to distant future, there will be shortages...

So the world economy is going to have the double whammy of economic deflation even as we discover we have rapidly depleting energy resources. To address that second problem depends on lots of capital, which is and will be in very short supply...

$NDX bouncing off of 1st and 2nd order trendlines...

This should maintain the Bullish bias...

The $USD rally first pulls back at 1/8 node...

This node is generated by the entire down move from July, 2001. Since moves almost never end at the 1/8 node, this says a dollar rally of some considerable duration is ahead of us. The current decline is only a correction in a dollar bull market. The earliest possible failures would normally occur at the 1/4 node, which are sprinkled throughout 2009...The more likely 1/2 nodes for earliest termination of the dollar rally, are three time bands spread out from mid-2010 to late 2011. The actual value at this recent top is .12932 where .12500 (1/8) is ideal (3.4% off from ideal). The value of the currency basket in the index at the top is 88.46, as read off of Stockchart's output.

Even though I find the concept of eventual dollar devaluation compelling, this chart is suggesting deflation for quite a while...

USO and $WTIC showing energy in energy...

Note the bottom I called on USO a few days ago. Today USO is up 7.90% and it's cousin $WTIC is up 15.37%...they are moving...

Little change in $NDX so far...and other matters to discuss...

So far about the Stock Market, little to write about, still in a weak rally...

Probably of greater importance is the negative interest rates appearing on Government Bonds. It's slightly ominous when most investors are thinking the same way. Now that the hordes are all flooding into the presumed safety of treasuries sufficient to produce a negative interest rate, and knowing the market by it's nature fools most of the people most of the time, it feels like a trap is being set...
I still think a dollar devaluation is likely at some point, and that might be the trap, or maybe not, as that's probably a bit down the road. It may be something unanticipated..in any event we are in really unusual waters now...

Thinking about this a little longer, a rise in interest rates on those bonds could be devastating as existing bond face values decline as interest rates go higher. So circumstances that would force interest rates higher, especially fairly quickly, could be the mechanism, if not the rational or the trigger, for a bunch of people to lose more money, which is what markets like to do...As a trap, it has to be fast to provide no exit for a lot of people. Or if it were to happen more slowly, it could work against people because other options, other than bonds, could actually be worse. That would be another kind of trap. I will leave it to your imagination to think of scenarios that would provide these outcomes.

The Baltic Dry Index...

Anyone who thinks the current struggling rally is going to have any legs based on fundamentals should check out this site:

http://www.investmenttools.com/futures/bdi_baltic_dry_index.htm

This keeps track of the state of international commerce. Basically, international commerce is just a couple of notches above nonexistent right now.

The nice thing about this measure is that governments can't spin it or alter it. It is what it is. It also led the decline of October 2007. It's a leading indicator.

If the "world economy" is "not happening" then a U.S. as well as a world recovery is nigh impossible.