Sunday, January 8, 2012

Weekly Thoughts

The lines may look like a mess.  Easiest way to interpret is to see where the support/resistance lines are the most bold.  The more bold or the bigger cluster of them, the more important they are and the more people who remember those prices.  

 SPY (Equities)

UUP (Dollar)

Dollar broke out this past week, putting a damper on the early stock rally.  Even with a good headline jobs number on Friday, the markets closed down and was only able to eke out a doji for the week.  Both markets are still in their respective inflection points.  A dollar breakout seems to foretell a short-term downtrend for stocks.  This correction may be hefty and quick as it falls from such an important point with many people watching.

We have been making a series of lower lows and lower highs since July (with an unconfirmed higher low).  Until that changes, all rallies should be viewed with suspicion.  News flow continue to beat the same drums.  Chronic economic risks are lightening up, but acute black swans seem to perpetually lurk beneath the surface.

Jam of the Week