Friday, July 1, 2011

Interesting Days Ahead

The Euro is at an interesting juncture. Will the following few weeks be yet another failure of the USDX to mount some kind of decent rally accompanied by the Euro snapping out of the current 2 month correction? The next few days will be interesting.

While Gold has mirrored the action in equity indexes and currencies for much of the post melt-down recovery, there is possibly a divergence between the metals and the other two vehicles. Gold looks like the path of least resistance is down while equities are poised to break out and the currencies are non-committal as of yet.

Dow Transports

The Transports are flirting with all time highs--leading other indexes higher. Is the economy about to get much stronger?
The next week will be important for the Transports--and hence all equity markets. A clear break to the upside will pull markets higher while a failure--note that RSI is in over-bought--could be a catastrophic event for the markets.

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