And the Oscar goes to

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Ashlie Conley
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 And the Oscar goes to Hank Paulson, it seems, after being honored by his own bronze medal issued by the U.S. mint. The apparent irony of the decision to honor the man who orchestrated the largest bailout we have ever witnessed is only exceeded by the shameless fraudulence by which pulled the ultimate fleece on Congress and U.S. taxpayers. Almost on cue, the market started down on the Pesavento-index date on February 21 that we have discussed over the past two weeks. The market closed down for four days into February 25 where a combust event (mercury conjunct the sun) kicked in and coincided with a rally. In my opinion, this is perhaps the most important rally we will see this spring as it will determine if we are at a major precipice. If we do not rally this week and continue below the low achieved on February 25, we should be looking at minimum down trend of 3-5 weeks possibly characterized by severe weakness. In spite of this (or maybe because of it), the bullish consensus remains as high as it has been since 2000 and 2007, setting up perfect environment for a significant correction. Furthermore, there has been virtually no insider buying to speak of in recent days. With this in mind, all things point to this coming week being a critical one for determining the direction of the markets. This week, our letter and charts will place a little more attention on the futures rather than on the stock markets as is usual, although I believe they are all interconnected. One of the main patterns that has completed is a major AB=CD in the CRB commodities index and we are starting to see some moves to the down side in soybeans, wheat, rice, and sugar. Another intriguing point to remember is that the futures markets were the first to turn down back in 2007 and could lead us again here. Patterns Profits & Peace of Mind - Page 1 02/28/11

2 Treasury Bonds Based on the trends in the long term (weekly) charts, it appears that Treasury bonds could rise beyond the 121 level we mentioned last week. The Treasury market is clearly oversold and bonds could easily rally several more weeks if there is a flight to quality due to one of the conflicts in the Middle East. Despite all of this however, the long term market still looks very bearish and it is remains likely that interest rates will go substantially higher. Precious Metals Enclosed this week are charts covering several of the gold producer stocks, in particular Newmont Mining, Barrick Corp. and Rand Gold. These charts show that being long mining stocks has not been very effective as a proxy for gold and silver. Gold itself is close enough to its old high of $1,435 that it could get there again in a matter of hours. Any close above $1,435 could set up much higher prices in the yellow metal. Silver, which has been the lead during this run in precious metals, has already exceeded the January highs and hit the exact expansion of that move at the $34.40 per ounce level. The bullish argument for silver and gold is so overwhelming that it reminds me of what happened in During this period, Sunshine Mining offered corporate bonds that were redeemable in silver at $20 per ounce when silver was trading above $35. These bonds did not do too well over the next 15 years, another example of how the news sometimes is a little bit late. Foreign Currencies This week, we should pay special attention to a trio of currencies versus the U.S. dollar the Canadian dollar, the Swiss Franc, and the Japanese Yen. All are potentially ready to make turns. As illustrated on the charts, there are various patterns completing and these could represent very interesting low risk trading opportunities. The opening on Monday will be quite important because the weekend orders will be already placed. This potential set up is also our trade of the week and I will issue a special trade alert when there is a signal that things are in play in order to keep our risk as small as possible while maximizing expected returns. Crude Oil This past week, the crude oil complex was a picture of Fibonacci expansions. Crude oil hit $ per barrel, which was the exact retracement of the move from 143 down to 30. The same was true with heating oil as well as for gas futures with each hitting the exact Fibonacci number. All of this is coming at a Patterns Profits & Peace of Mind - Page 2 02/28/11

3 time highly influenced by tensions in the Middle East. Should crude oil exceed 104, it could easily hit 130. However, in the absence of that happening, it could also be setting up for one of the best shorting opportunities over the coming weeks. Technical Corner This week s Technical Corner focuses on the relative differences between Fibonacci ratios and the patterns that we typically use, such as the Gartley and butterfly patterns. Several people have asked me which of these are more important in trading. While both are exceedingly useful, my personal feeling is that Fibonacci numbers themselves are more important than the prevailing pattern. In other words, in most cases, the AB=CD may not be as important as the completion of a retracement or expansion. My reasoning for this is that, once achieved, such numbers provide targets and help give us a reference for what the potential risk and reward levels are. In an ideal world, both would be 100% concordant, but in everyday trading, it is critical to be aware of the Fibonacci ratios that are present. Final Thoughts I cannot stress enough the importance of the major AB=CD Gartley sell signal that has developed in the long term chart of the CRB commodities index. The pattern is nearly perfect in both price and time and is increasingly pertinent as we are seeing cracks in the dam of inflation via food (this is especially apparent in rice contracts). You can see that although we have had incredibly bullish news for rice, its price has dropped 10% in just a few days. Wheat and soybeans have also dropped noticeably. As you can see from the charts, they all stopped at Fibonacci retracements from previous lows which keeps them in a bull market for the moment. However, if we go below these levels, then there is more probability of further moves to the downside. Keep in mind that crops for the upcoming year have not even been planted yet as most of the arable ground is still frozen. However, integration of global markets dictate that they anticipate what countries must import and export at all times. The fact that grains and oil seeds have retraced and is important as it is also seen in crude oil and some of the other soft commodities such as sugar. If hyperinflation is coming, it will almost certainly be accompanied by the U.S. dollar index going below 73 while gold and silver will skyrocket. Interestingly, February is a time when cycles tend to hit key phases and with the end of the month we will soon know where things are turning. Patterns Profits & Peace of Mind - Page 3 02/28/11

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5 Treasury Bonds Patterns Profits & Peace of Mind - Page 5 02/28/11

6 Precious Metals Patterns Profits & Peace of Mind - Page 6 02/28/11

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9 Crude Oil Patterns Profits & Peace of Mind - Page 9 02/28/11

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12 Foreign Currencies Patterns Profits & Peace of Mind - Page 12 02/28/11

13 Commodities Patterns Profits & Peace of Mind - Page 13 02/28/11

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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.

15 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 15 02/28/11

Another Three Go Down

Published by TFNN, Corp. ~ 601 Cleveland Street, Ste 618 Clearwater, FL 33755 ~ 1-877-518-9190 ~ http://www.tfnn.com ~ Copyright 2010 ~ All Rights Reserved Another Three Go Down Patterns Profits & Peace