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Sunday, February 22, 2009

S&P 500 SPX - What Dow Theory SEll? SPY, DIA, QQQQ, TSE, CDNX, FXI

Is history only a guide or always a Destiny, we will find out next week. If we forget about Dow terrifying chart and Sell signal in Dow Theory, this chart is much more friendly and we will be happy to have it after after all things which could go wrong has gone wrong with Obama's Pork Bellies Stimulus. November Low is not violated, we have higher MACD, Friday session delivered a Hammer - bullish candle. Can we say Decoupling again, Financial economy which is represented by DOW, do not forget that GE is a financial company as well now as Citis and Banks of America, could be decoupling from other sectors like energy, utilities and consumer staples. Why it is important? This chart shows that if PPT will be back from skiing in Courshevel by Monday there is some chance to start a rally we were talking about, confirm US Dollar Double Top reversal and try to pretend that announced programmes are different from nationalisation of the banking and insurance sectors. For us it is important that it will pronounce that Inflation is back into the picture by public recognition. We can not be smart alone and need somebody to sell our carefully accumulated stocks in Reflation plays: first trade will be recognised in Gold move (already happen), then Major Gold producers will make new highs, Grains will rally, Basic metals will follow on China recovery.

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