World is turning to Euro during global sell off!

 

nowayeurostrongerthanus$aug24

I don’t think I will be telling you anything new when I share that a global sell off in stocks is taking place the past few days.

If I were to have shared that the Euro would be a safe haven currency last week before stocks sold off, what would you have said? Would you have said something similar like the guy above?

Below looks at the current price patterns of the Euro and King Dollar

eurobreakoutdollarbreakdownaug24

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As you can see from the two-pack above the world is buying the Euro as its breaking falling resistance and the world is selling the US Dollar as it breaks support. Think this price action will surprise a few investors?

Below looks at the Hang Seng index over the past 50-years.

hnagsengbreaking40yrsupportaug24

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The Hang Seng index has been above one support line for the past 40-years, which is pretty rare on a global scale. 

This index is pretty correlated to the S&P 500 as it hit important lows in 2003 and 2009.

Correlation risk remains high right now, from a stock market basis. If this 40-year support line totally gives way, the price action should be respected on a global scale!

 

Looks like 2000 again for this tech index, says Joe Friday

joefridaylookslike2000nascompaug21

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This chart looks at the Nasdaq Composite Index, dating back almost 25-years.

The strong rally in this tech index off the double bottom in 2009 has been very impressive, as tech has been stronger than the broad market.

The rally now has the index back at 2000 highs level at (1) above. The strong rally has pushed monthly momentum back to levels, last seen in 2000.

The rally over the past few years looks to have formed a rising wedge, which suggests lower prices two-thirds of the time if support is taken out.

Joe Friday just the facts…. A break of support off the 2009 lows (which has NOT happened on a weekly basis) would be a concerning development for this index, should it happen.

 

Gold Bugs and S&P 500 about to change trend?

spygoldbugsratiorutruhaug19

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This chart looks at the S&P 500/Gold Bugs ratio over the past 20-years.

As you can see the ratio trended lower from 2000 to 2011, reflecting that the Gold Bugs index was stronger than the S&P 500 for over a decade.

Over the past 4-years the opposite has been true as the S&P 500 has been much stronger than Gold stocks (S&P done well since 2011 and Gold Bugs index is down nearly 70%).

Is a change of trend about to take place in this ratio?

Of late the ratio hit the 50% retracement level of the 2000-2011 decline and a steep rising resistance line. At this time one can NOT say the trend has changed, because it hasn’t!

What would one look for to see if this trend is truly changing? I would look for this ratio to break support and if the GLD/SLV ratio and the GDXJ/GDX ratio (shared with metals members each week) also breaks support at the same time, odds ramp up a trend change in the hard hit metals complex is changing.

If staying on top of these potential opportunities in the metals complex is of interest to you, I would be honored if you would become a metals member. Details on membership can be found HERE of by clicking below.

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