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Saturday, January 15, 2011

Week-end Observations!!!

Roy has his week-end update out, and today takes a look at Oil, and Gold, after a few minutes of over-all general comments about the market. To view the clip, Click here!!!
TNX, which tracks the 10 year Treasury Bond Yield is close to wrapping up its period of consolidation that it has been in for the last six weeks. The RSI is now back to neutral territory, and the STO is entering over-sold conditions, once this two indicators roll back over to a buy, TNX should break out of the triangle and proceed on with the current trend which is up. The upper trendline is a very important level of resistance, if TNX can clearly breakout to the upside, long-term becomes very bullish(higher yields), other-wise if the trendline holds, it re-enforces that TNX is in a long-term triangle which is bearish(lower yields).
Here is the TNX, long-term, BTW, the gray dashed lines on this chart outlining a possible triangle are the green lines on the Daily chart above this one. The Monthly chart does suggest that TNX will breakout and invalidate the triangle scenario, the STO and RSI are both on a buy, and are only half way to the upper over-bought levels, giving plenty of room for the price action to break above trendline resistance. Also of note is how the 20 month MA is acting as support.
-Silver and Gold Fall Hard: A Buying Opportunity?

2 comments:

  1. Weekend Charts
    http://99ercharts.blogspot.com/
    Have a great one!

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  2. I think Roy has made some good calls but even he seems to be affected by the market's growing 'complexity.' Wasn't it two or three weeks ago he was quite forcefully describing the silver 'parabola' as a complete vote of no confidence in the Dollar? Well since then the Dollar has fallen a little and silver has done what? Also oil is getting to a price where it has always had an adverse effect on the real economy - what's left of it anyway. The average price in 2008 was $97 when credit was far more widely available than it is now. I read somewhere that every 1 cent rise in the price of gasoline decreases US consumer disposable income by $600 million per year and that every $1 increase in the barrel price of oil decreases US GDP by about $100 billion per year. But hey nothing on earth can possibly derail this bullish freight train, right?

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