www.armstrongeconomics.com
The euro continues its fall and the likelihood of reaching 116 is starting to dwindle. Even the British Telegraph
has come out and stated that the bail-in plan for government bonds in
Europe risks destroying the entire euro system. We have to understand
that those in power are clueless. All they do is try to defend their
prior decisions by insisting they are correct and the world is wrong.
When we look at the volatility and panic cycles starting next week, it
appears the crisis may emerge in Europe.
We can see how this crisis could help an extended gold rally. We are
also seeing the Dow holding, which is the international money for they
like to buy the trophies whereas the S&P 500 is domestic. So we have
not penetrated last year’s low in the Dow and there is NOTHING
that takes place without a reason. The Daily Bearish to watch in the
cash euro is 11070. A daily closing beneath that warns this may be down
and dirty.
When we look at the technicals, the Stochastic is turning down as well.
We did not exceed the recent Breakout Channel and the former Downtrend
Line lies at the 109 level. Penetrate that area and we are off to new
lows.
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