Many bullish trending charts broke in the run up to xmas. But we have not experienced any dramatic falls that price watchers may have expected. Seasonals have done their magic trick of supporting prices and stabalized things. Of course central bankers and some slightly better economic data from the US has assisted. The DOW cash is up nearly 4% for the year. Gold is up for a 10th year, this time by 15%. Gold has once again beaten cash. Ill run through all these charts on an end of year wrap. For the moment we have some illiquid xmas trading. Many have shut up shop already.
Here the proxy for on and off risk. The AUDUSD.
We can clearly see the technical wedge pattern emerging. For the moment the trend is down. The DX is strengthening and is threatening a sustained breakout. The DX is up for the year at this point but more importantly seems to have scored a chart base in the year 2011. The impact of this strength will most likely be felt in Q1, Q2 2012. For the moment we have an impass now over xmas.
The CRB remains broken. We have a spike back up having scored the break. Oil is supporting the move as are the agri instruments for now.
The nas100 remains broken and the semi conductors, considered by many as a lead indicator for all US markets remain broken. Imo there are good reasons for the dow strength as we discussed before.. Here the Nas100.
The nas100 is negative for the year in spite of the last week’s rally.
My summary, this looks like classic year end window dressing to me. I wouldnt take it too seriously. There is no santa really and in anycase the ‘happy season’ will be over all too quickly. Rest up and enjoy. All to play for as we come to Q1 2012. Keep getting paid to wait by high yielders and hedge at least a portion of the long portfolio imo. Its going to be a rocky road in the first half of 2012 this is certain.
All the best guys.
Rich
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