MARKET REVIEW: BEARISH/SIDEWAYS (02.03.2008)

SUMMARY

CRB Index versus Bonds -> Bullish
CRB Index-> Bullish
Bonds -> Bullish
Oil-> Bullish
Oil & COT-> Bullish
Gold-> Bullish
Gold & COT-> Bullish
US Dollar-> Bearish
US Dollar & COT-> Bearish
DJ Ind.-> Bearish or Sideways
S&P 500 -> Bearish or Sideways
Nasdaq -> Bearish or Sideways

Bonds and commodities are negatively correlated. But this relation is broken this week.

This broken relation affects the expectations on the stock market side. In that case markets can either follow the big trend (which is bearish) or consolidate.

It is allowed to be SHORT on the STOCK MARKET this week.

DETAIL

Long term comparision of S&P500, CRB Index, US dollar, and 30Y Bond Price



CRB Index versus Bonds

Commodities are bullish in relation to the bonds. But as the CRB index alone shows that the bullishness of commodities are weaking and bonds are gettin stronger. This can slow down the CRB/Bond comparision in the image below. Increasing ratio shows that economy is strengtening. Increasing ratio advises that you should be in inflation type stocks e.g. gold, oil, aluminum, industrial material stocks. On the other hand, financial type stocks will suffer e.g. insurance, brokerage.



CRB Index

Strong CRB index favor the currenc y of commodity exporters like canadian dollar and austrialian dollar.



Bonds





Oil



Oil and Commitment of Traders Report



Gold



Gold and commitment of traders report

Trend is bullish because gold is used to hedge inflation. Inflationary trends are high.



US Dollar

US dollar is bearish which is good(bullish) for commodities. US investors tend to invest in foreign stock when US dollar is decreasing.



US Dollar Commitment of Traders Report



Dow Jones Industrial Average

Last bar shows that bulls tried to increase the price but bears pushed the price lower than the open. Volume is higher on the last bar, indicating



S&P 500

Similar to the Dow Jones Index, bulls are tried to increase the price during the week but bulls pushed the price lower.



NASDAQ