Weekly Technical Comments – Markets on a “Knife Edge”

As we sit here waiting for central action, or not, technical indicators are demonstrating significant moves in either direction.

The Swiss team are using the “make or break” term here and now. I’ll leave all the detail on levels and various asset classes to the report. They do an excellent job of summing up things in my opinion. I cant disagree with this report in any way in fact. From the US indexes to the Shanghai and cylical mining stocks to industrial metals and the eurusd. Their analysis on gold – ‘buy weakness’ and I agree and have started the process myself to step up my allocation again.

Monetization will come. It has to come as the alternative is unimaginable. The issue is whether we get a crash prior to the ‘great’ monetization or not? We are on a knife edge so run the longs but buy some protecting hedges where you see value is my play. Buy put options on indexs or buy vix calls or sell call options out of the money on stocks you hold. And go equal weight currencies for now. Until we get direction take the sting out of the move that is about to occur. Thats my call at this moment in time. We await the central bank news flow.

Luck to all and safe trading and investing out there.

Here the report: Weekly31-07

And I”ll leave the final comment to the wire at Deutscheborse, from a few minutes ago..

“Draghi Under Market Pressure To Walk The Talk – Frankfurt, ECB, President Mario Draghi, will face a massive communication challenge on Thursday, as the central bank is unlikely to follow through with radical new measures markets thought they had been promised”.

The markets have got ahead of themselves thinking the deal was done for ECB monetization. Perhaps it is and insiders are front running the issue but as private investors its better to wait. Lets see the money on the table. The promise of money from euroland is no longer enough. In my opinion.

Rich