Euro neckline is officially broken

The neckline of the euro head and shoulders officially broke today, this is bad for stocks and commodities. Bonds are still recovering, but I dont think that there is that much more left to the upside on bonds.

Cash21

This rally is getting close to being over in equities.....

Here is some charts with some narratives that I thought that I would put together. All of these other instances we were told that things were turning around. The same people who are telling us that things are turning around are the ones that told all the other times.

I keep seeing these stories about the skyrocketing foreclosures that are going on STILL going on and the coming commercial realestate foreclosers, skyrocketing delinquincies etc..... And I think to myself that this rally is coming to an end soon.

Cash21

Euro fixing to break down...treasuries get some relief...

The Euro is fixing to break down, a investors show signs of looking to seek out the dollar and treasuries for a safe haven, which is laughable, as if the dollar and treasuries is a safe haven, but nevertheless, this stock market is poised for a large sell off going into a triple witching expiration week, which should give treasuries a nice oversold rally, as well as the dollar.

Cash21

closer look at these charts, notice the upper right

Another end of the day rally BUT........

Here is what I am seeing on the Major indexes, the dow and the sp500. One of the major reasons the market is having a hard time going higher, is we are hitting a major trendline on both of the Indexes. There are other indicators that say we should go down right here as well, but nothing says it quite like it does on these charts. With the Bonds yielding twice as much as they were 6 months ago, it is a no brainer that the money has to come out of stocks and back into bonds.

Bonds crashing! 10year yield nearing 4%!

This is not good. There is a ten year auction today on ten year bonds, and, well it is not going so well. The stock market is finally responding to the higher interest rates like you would expect it to. This is huge news. This is a major secular shift in the direction of treasuries, and this is extremely bearish for the "greenshoots" in our economy. All of the government and federal reserve's efforts to get the credit market's working again are for nought due to the rising tide of interest rates.

The wild card now is the dollars response to the rising interest rates. Right now the dollar is strengthening, which is helping the market to sell off, but if we go into a real bottomless crash in bonds, the dollar should come under pressure as well, bonds and the dollar could both go into freefall, which would be the perfect storm for hyper inflation.

Cash21

more treasury auctions, and watch the euro!

Greetings,

Well, what a boring last couple of days in the markets. Tomorrow should give us some spark. There is a 7-10 year auction of more of that crappy paper from our treasury. This should give the treasuries more downward pressure which could get us into the 4% yield range on the 10year bond. This would be a level that should start to draw money out of stocks and into bonds which would cause a rally in the bonds. This is what I am hoping for, I really think that it would be healthy for us to have a big sell off in the stock market. I personally don't think that this market can go much higher, but I know that there is money waiting on the side lines for opportunity to get into this "roaring bull market", and a sell off would give them the opportunity. I am looking at the SP 870 area as an area that the bulls would step back in with force.

All of the printing presses, and the government sponsored bailouts has given the banks the opportunity to appear like they have escaped the storm, but there is no doubt that the delinquincies on mortgages is sky rocketing right now, and there is clearly going to be more pain ahead. They may be able to make it through one more quarter before everything falls apart. We will see.

The main indicator that I am watching right now is the EUR/USD. If the Euro sells off vs. the dollor, then stocks and commodities will most certainly sell off as well. If you cant chart currencies on whatever platform you are using, then you can try the FXE which is an exchange traded fund that tracks the Euro vs. the Dollar.

Tomorrow should be the day that we get some direction.

Cash21