This May Be It (Maybe)

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Merry Anthony
5 years ago
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Published by TFNN, Corp. ~ 601 Cleveland Street, Ste 618 Clearwater, FL 33755 ~ 1-877-518-9190 ~ http://www.tfnn.

1 Published by TFNN, Corp. ~ 601 Cleveland Street, Ste 618 Clearwater, FL ~ ~ ~ Copyright 2010 ~ All Rights Reserved This May Be It (Maybe) Last week I discussed the potential significance of the three P-Index dates that fell within the past seven days. It turned out to be timely as the U.S. stock markets slipped noticeably. However, it remains too early to make an assessment as to whether these three P-index dates were the direct cause of the sell off on Friday. I say this because we were only down 1.5% on Friday, although this is a considerable amount given that it came following some relatively good earnings news and economic data. The other elephant in the room this week was the Egyptian uprising. This has become (and will probably stay) a very emotional factor especially for the U.S. markets because of Egypt s strategic location in the Middle East. Apart from controlling the all-important Suez Canal, it also neighbors some Israel, Saudi Arabia, Libya, and the Sudan - a rather volatile mix, to say the least. The events in Egypt may finally result in the ouster of a corrupt regime that has ruled for over thirty years. However, this regime has been a steady ally to the U.S. and Europe, and has helped maintain the fragile peace that currently exists in the region. Its fall may represent a critical shift in the country s attitude towards the West. Moreover, there is the ever present threat that it may spreading to other countries as we already saw in the case of Tunisia barely a month ago. With rumors spreading within Israel that Saudi Arabia may also be vulnerable, this is definitely a development all investors should monitor diligently. From a technical perspective, the Nasdaq and its key stocks (e.g. Apple, Google, and Amazon) were under extreme pressure on Friday, adding to the impression that this market may be topping. The New York Stock Exchange index has barely closed above the level and in my opinion the action there still appears to be nothing more than a bear market rally. We will be seeing a new moon this coming Wednesday (February 2) along with two major aspects of Venus, so it would not be unreasonable to expect a bottom, at least for the short term, around then. The question is whether we will be moving down sharply into Wednesday or will the market take little concern of the news. Patterns Profits & Peace of Mind - Page 1-01/31/11

2 Treasury Bonds and Notes Treasury bonds and notes have continued to hold their and retracement levels, respectively. A major question is why bonds have remained in this narrow trading range over the past six weeks, which typically signals an oncoming distribution phase (i.e. a dramatic shift in price direction). The trigger here might well be a sudden flight to quality in response to any of the developments in international events in the past few days, causing Treasury bonds to rally. The municipal bond index has been able to rally since the threedrive to the bottom pattern we had mentioned previously and there appears to be strong resistance at par, i.e On the other hand, inflation-adjusted bonds (TIPS) look absolutely horrible. Given that we have just had tremendous moves in virtually all the commodities (such as copper, nickel and palladium), one would expect them to rally strongly. The problem here could be that Pimco, supposedly the owner of nearly 70% of the entire market for these bonds, is looking for a way out. Foreign Currencies Last week we featured emerging patterns in the Euro and U.S. dollar and our analyses proved spot on for both. The Euro hit the exact retracement at this past Thursday. It has since dropped over 150 basis points and looks like it may go much lower. The U.S. dollar also stopped at the exact retracement after falling 10 days in a row. Meanwhile, the Japanese yen still continued to hold the 82 level and should have strong support between 82 and 80. Any move below 80 in the U.S. dollar/yen would be a bearish signal for the longer term. Precious Metals Gold has completed an AB=CD pattern at the $1,320 level and is looking to rally between $50-80 per ounce over the coming days. Remember that $1,380 was where the original break in gold first occurred several weeks ago. On the other hand, silver made the exact retracement (to the exact penny!). It too is poised for a rally. Copper did not sell off on Friday with the rest of the market suggesting there is still the potential for it to test the 4.50 level one more time. Crude Oil Crude oil stopped at the $85 level this past week. On close examination of the hourly chart for crude, you can see that it was a retracement towards the previous low in 2010 as well as an expansion of a more recent low in January. These ratios are typically suggestive of strong support. Note that oil did rally 4% in just a few hours on Friday, even if much of it was related to short covering and the Egyptian crisis. The unusually harsh winter weather in the U.S. continues to push heating oil prices, which have been climbing without respite. Patterns Profits & Peace of Mind - Page 2-01/31/11

3 Technical Corner Our Corner this week consists of links to 4 sites that I employ for gathering astroinformation. As I have elaborated on in previous editions, the use of astroharmonic events provides a powerful additional tool for identifying movements in the market. I suggest for those of you who have an interest in this subject to keep these on hand as they are useful for obtaining up to date information on upcoming astroharmonic aspects. With the recent publications by MIT s Andrew Lo and the Royal Bank of Scotland also hot on the subject, we will almost certainly hear more about this technical approach and it may be helpful to start to learning about its intricacies Final Thoughts This week saw another iteration of the economic forum in Davos, Switzerland where the most powerful and greatest minds converge annually to discuss trends in world development. One of the key consensus points to emerge from the meeting was of how the BRIC countries (Brazil, Russia, India, and China) would help pull the economies of the rest of the world out of their doldrums and propel them into great new bull markets. While the growth potential of these nations are undoubted, close examination quickly reveals that these nations are all currently embroiled in long term bear markets and may actually be weaker than the U.S. market. The charts for the ETFs of several emerging countries are attached below. This is especially true for Brazil, India and China. In my opinion, this bearishness would be a major factor unless they manage to take out highs of last fall. Developing nations are faring no better. While the European currency crisis has apparently calmed down for the moment, rumors coming out of Greece and Berlin indicate that the sovereign debt issue may be very alive. Word has it that the European Union, together with the International Monetary Fund, is in discussions with the Greeks about a stealth restructuring. Under such a scenario, the Greek government would repurchase its sovereign bonds at below par (approximately 75 cents on the dollar), resulting in a debt restructuring without a formal sovereign default. Lastly, Hong Kong officially became the most expensive place to own real estate on the planet this week, a record that will last until the last unit is bought. Patterns Profits & Peace of Mind - Page 3-01/31/11

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16 Disclaimer: Trading in securities such as stocks, options, indices, currencies and futures involve risk and should not be undertaken without due diligence and serious independent study. Subscribers may carry out their own trading based on what they learn from Patterns Profits & Peace of Mind, but all risks of potential financial losses are the subscribers responsibility. TFNN will be in no way liable for financial losses resulting from trading decisions based on this newsletter. Past performance is no guarantee of future results. Reproduction in whole or in part is not permitted without prior written consent. All rights reserved. Patterns Profits & Peace of Mind - Page 16-01/31/11

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