Coming out of the economic slump Message Board

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Strategies & Market Trends : Coming out of the economic slump

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From: prosperous	2/27/2009 10:32:00 PM
	of 1

Looks like the bond markets may be in trouble earlier than I think. My sense is something weird is going to happen in next month, the chart indicators are very mysterious and counter-intuitive considering where we are in the economy cycle. Gold stock chart has formed a cup and handle pointing to 400-450 (33% rise from here) finance.yahoo.com If you look at gold metal vs stocks the stocks have lagged metal and seems stocks will catch up (I would say 11-17% upside for metal assuming 2.5x leverage (1100 range). finance.yahoo.com The 10 year treasury chart has also made a cup and a handle that is about to break out: This is pointing to higher interest rate of 4% on 10 year bonds (33% rise) finance.yahoo.com The treasury short is also pointing to 58 region with a cup and handle (well formed) finance.yahoo.com My suspicion is some unexpected event will cause very rapid changes in near future, I don't know what that event is going to be but it may be pushing interest rates much higher which no one expecting at this time (some major default or bust some where) while govt is desperately trying to keep rates down. If the treasury rates go up, economy will go in a huge tail spin and stock markets could quickly crater. All these are necessary steps for a recovery, but that is not the scenario my intuition would guide me to, which may mean it may more likely happen :-) This would point to low bonds, low stocks, low real estate, high gold, oil more likely on the low side. It is good step toward cleaning excesses; however, I see govt doing everything to erode already low confidence people have in the system, just speaking the right words and sentences (that are right steps and what people want to hear) and then doing exactly the opposite :-(, may help keeping public opinion polls ratings for a while until folks latch on

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