MDA - Market Direction Analysis Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis

SPY 691.79

+0.6%

4:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: gfs_1999 who wrote (72421)	3/16/2001 10:29:46 PM
From: gfs_1999	of 99985

BOND BREAKOUT…With all the recent focus on the stock market, we can't forget that things are happening in other financial markets. Money coming out of stocks has moved to bonds and notes. Chart 1 shows the June T-note contract breaking through its early January high. (see Chart 1) The T-bond contract also hit a new closing high. The simply tells us that the uptrend in bonds and notes is still intact. YIELDS HEADED LOWER…When bond and note prices move up, yields move down. Chart 2 puts the interest rate trend in better perspective. It shows that yields actually peaked over a year ago, and have fallen to the lowest level in two years. The 10 year T-note yield appears headed to its old lows -- ranging from 4.50% to 4.25%. (see Chart 2) CRB BREAKS DOWN…There's more than flight-to-quality buying pushing bond and note prices higher. Weakness in commodity prices is also helping. The CRB Index peaked last October and has been gradually weakening since then. Today, it broke chart support and fell to the lowest level since last spring. (see Chart 3) Falling commodity prices are consistent with lower interest rates and rising bond prices. DOLLAR RISING…Meanwhile, the U.S. Dollar Index has gotten new legs. Chart 4 shows the Dollar Index jumping over its February highs to the highest level in four months. A jumping dollar often puts downward pressure on commodities. (see Chart 4) One of the commodities that's getting hurt by newfound dollar strength is gold. GOLD RETESTS SUPPORT…We were encouraged a week ago by April gold's move above initial chart resistance near $270. Unfortunately, gold has fallen back below its breakout point (which isn't a good sign), and is retesting initial support at $260. That disappointing action is taking a toll on gold stocks. (see Chart 5) XAU RETESTS 200-DAY LINE…Last week the Gold Index (XAU) rose above its December high to register a chart breakout. Unfortunately, there hasn't been any follow-through. We don't like to see a market fall back below its breakout point - which the XAU has done. It's now retesting its 200-day average. (see Chart 6) [Newmont Mining (NEM) has already broken its 200-day line]. Not very encouraging action

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next