Tuesday, August 01, 2006

Crazy Markets!

So, what's going on? There is so much debate on whether the markets are coming back to rally, or what. Look at these charts, the DOW and NASDAQ show signs of leveling off their declines and making a comeback.

The Dow's got a nice channel going. But the MACD indicates that it might not head back down to the support line. Hmmm, a good sign.

The NASDAQ doesn't have too much to go with. But there is the same positive divergence as the DOW. Another good sign.

The Gold Bugs Index closed today with a price that confirms a resistance level. If it goes up tomorrow, I might consider that a breakout. If it goes down, however, then I'd say we're still waiting for the next FED guidance.

The S&P 500 looks like it's moving nicely in a new channel. I don't see a lot pattern confidence here except the resistance level. This might not be a good sign, except consistent bouncing against the resistance might indicate a desparate attempt to break out.

Finally, the bond rate. Bonds seem to be confirming the statements made by PIMCO's Bill Gross last Friday. He forsees a Bond rally soon. Bonds should be rising in the near future, perhaps after one more ride up the channel as the daily talking heads pump up the Fed Watch.

But if Bond prices go up, aren't the stocks supposed to go down?

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