Strange Days in the Market
Thank you all very much for the many Emails. It’s really great to know my market updates were missed. We just had a few holidays here in Israel. Really sorry for leaving you hanging.
Yesterday afternoon we heard some very positive news from Spain. Congratulations, they’ve managed to put forth a very impressive budget for 2013. The reforms not only met the EU requirements, they passed with flying colors.
Below is a chart showing the Euro/Dollar, with a Fibonacci Retracement line. The Fib line is drawn from the beginning of the Euro Rally, which began with Super Mario’s epic speech on August 3rd. We can see that it bounced twice off the first level then dipped below. After the news yesterday, the €/$ managed to break the retracement channel to the upside.
Gold is very high around $1780 while Oil remains low at $92. So there’s a lot of divergence amongst commodities. Also, the Euro is up where the British Pound is down. So there’s divergence in the currencies as well.
The Bank of Japan seems to be losing all credibility with the Yen stretching the upper limits again despite the fact that they are printing money like it’s going out of style.
A lot of little bits of data are coming out on the Calendar today. Trading is likely to get a bit hectic as this strange week draws to a close. My recommendation is to limit exposure and keep a low profile until the middle of next week or until we get some further indication of where the market is going.
Let me know if you have any questions or require any assistance in your portfolio.