Have we seen the worst of it?

This post is being written from the breakfast room at the Comfort Suites Maingate East in Kissimmee, Florida. We have been driven from our home in Boynton Beach, Florida due to Hurricane Wilma. When we left on Wednesday Palm Beach County had no power, no gasoline, no ice, no food. We also had lost all patience. So, we packed up a fully fueled car and headed north. We left anarchy and arrived in paradise! Other than making sure the car was topped off with fuel the day before the hurricane hit, the smartest thing I did was pack up my family and get us out of that mess. So, assuming we have power by Monday I'll begin posting market comments next week.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

WILLLLLMAAAAAAAA!!!!!!!!!

Hurricane Wilma is charting a course for the Southwestern Florida coast. If it continues on its current path it will cross over the Southern peninsula and hit Palm Beach County head on. We are monitoring the storm's progress and will discontinue our market commentary until her actual path becomes more clear. It's time for us to get prepared.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Bonds are walking the tightrope.

To update my post on 10/4, the Bond market is currently testing long-term trendline support on the weekly chart and the market is going to need to bounce off this support at around 112.14-112.16 with conviction or the "stagflation" bears will most likely get the upperhand in this market. Today being Friday and with a host of economic data being released today, expect a significant level of volatility in the markets today. But, once the smoke clears, keep your eye on the bond market and look for signs that a rally is about to ensue. This could be a tremendous trading opportunity which could lead to an eventual rally all the way back to the 117-00 level. The alternative would be that the market closes below yesterday's low which would set the bond market up for a slide to the 110-00 level. Either way, there's an opportunity to make money.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Today's Global Investor article on Marketwatch.com.

I am pleased to announce that Barbara Kollmeyer, a financial writer for Marketwatch.com, included me in her story today on the Gold market. I have developed a wonderful working relationship with Myra P. Saefong, another financial writer, who covers the commodities markets for MarketWatch, a service of Dow Jones Newswires. They are the "best of the best" of financial portals on the Internet. Today's story is in Global Investor.

Stagflation is in the air.

Well, the economic data is out (who cares?) and the Dollar found the data supportive, at least temporarily. Certainly, a consensus seems to be building that inflation is going to be a problem somewhere down the road. How bad it will get is anyone’s guess. So, if the markets are concerned about inflation, then why did the Bond market rally on this morning news? I guess the market got stretched too far on the downside and it had to get some relief. This leads us to the Precious metals markets, which are currently seeing some selling pressure in light of the Dollar’s continued move higher. There’s good news here and the Gold chart supports that opinion. The DEC GOLD contract moved lower and traded briefly below the 20-day MA, which now sits at 472.50, and rallied to close above that area of support. I like the action here and I continue to favor the long side of the metals trade. The markets remain well bid and all attempts to move the metals lower are quashed by continued heavy buying as the markets approach these significant support levels. So, for now, it’s steady as she goes as I’m content to hold long for further gains.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

More on the Dollar.

If the Dollar/Yen breaks through Tuesday's low of 113.80 then I will take that as the first sign that my decision to SHORT the Dollar/Yen at 114.25 and 114.50 was the correct one. If you aren't yet SHORT the Dollar as I am then you may want to make a mental note of this level as a place to consider selling the Dollar. If the Dollar breaks 113.80 I won't be surprised to see the Dollar trading south of the 9/5 low of 108.75 in record time.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Comments on the Dollar.

The Dollar has rallied, from the low on 9/5 of 108.75, to today's high of 104.75 in a little over a month. That's a gain of 3.7% or exactly 6 yen from the daily low to the daily high. I wrote recently that you shouldn't fight the trend but I also believe that the initial stages of a trend reversal are where you can really make a lot of money. Paul Tudor Jones, one of the greatest traders ever, has made a tremendous amount of money by making large trades at tops and bottoms of various markets. I believe that the Dollar is at a crossroad here and I am building a SHORT position above 114.25 Yen and, although I believe as Mr. Jones does that LOSERS AVERAGE LOSERS, I believe that it is warranted when your analysis aligns with your conviction. So, I'm SHORT the Dollar/Yen at 114.25 and 114.50 and I'll cover and stand aside when and if the market closes above the 115.00 Yen level.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Precious metals update - 10/12/05

Today's market action in the Precious metals markets isn't all that surprising as DEC GOLD is currently trading south of the $475 level after hitting $483.10, pushing to a new 18-year high. There's nervousness in the pits and that's a good thing. With Gold still trading well above its 50-day MA of 472.30 this is not the time to bail out of the market. The Gold and Silver markets are still very sound from a technical perspective and, after this small retracement is done, we'll see Gold north of $500 and Silver rallying to test the $10 level. The global commodity markets are entrenched in a secular bull market that will probably last the rest of the decade. I know I've said this before but it's worth repeating. So, don't fret, be patient, but most of all, STAY LONG! There's a long way to go with these markets and a lot of money to be made.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

Don't sell your Precious metals just yet!!

It’s hard to say whether today’s strength in the Dollar will continue but, if this rally does finally falter, it will surely provide the fuel that will propel the precious metals higher. I’m betting on failure by SELLING Dollar/Yen above 114.25 while I continue to hold my LONG positions in both Gold and Silver. Confirmation of the end of the Dollar rally will come when the Dollar/Yen closes below the 113.00 level. At that point, I’d expect DEC GOLD to be testing resistance at that critical $500 level. I’ve noticed some traders and metals analysts have become somewhat less bullish on the metals and I find that surprising considering the fact that the metals have been able to continue their move higher in spite of the Dollar’s strength.

Dale F. Doelling
Chief Market Technician
Trends In Commodities

The LONG and the SHORT of it.

If you looked at a chart of the Interest Rate futures and the DOW futures you would probably not see a whole helluva lot at first glance. But I can tell you from firsthand experience that SELLING all rallies in the DOW and BUYING all dips in the treasury market (either the 30's or the 10's) is a strategy that has made a lot of money over the last few weeks. This is very tough for a trend follower but I believe that traders must take what the market will give them. This simply means that you need to be flexible and adapt your trading to market conditions. I believe that, eventually, these markets will break out and continue their respective, long-term trends. And, as long as I'm on the subject, I'll reiterate what I've been saying for a very long time - the recent market action just confirms my long-term forecast for these two markets.

DOW - a slow, grinding decline to 7,000 and then a collapse.
BONDS - yielding 3% eventually.

The only caveat that I must offer regarding the Bond market is the possibility that we will experience an extended period of STAGFLATION (floundering economy with rising inflation), which is looking more and more likely as the months roll by. Under this scenario, should it materialize, bonds would turn out to be as poor an investment as stocks. I'll keep you posted if my opinion on Bonds changes for the worse.

Commodities are HOT! Buy 'em now and hold on for the ride!

Dale F. Doelling
Chief Market Technician
Trends In Commodities

The Trend is your friend, so why fight it!

I recently wrote that the trend in the Dollar was about to come to a screeching halt. This may have been nothing more than wishful thinking. As I sit here tonight observing the early trading in the currency markets it's becoming quite obvious that the trend that began back on January 17th (vs. the Yen) in continuing unabated. With the previous high on 7/20 of 113.71 now history and the Dollar trading above the 114.00 level, the Dollar's overbought condition simply isn't enough to keep it from continuing on its upward path. With the 50-day MA at 111.56, we'll have to wait to see how the market reacts to that level when it finally begins to back off from the current levels. I'd be less than candid if I didn't say that I'm still skeptical of this most recent move higher. Suffice to say that my opinion and $3 will get you an iced latte at your local gourmet coffee shop so, for the time being, I'll stay on the sidelines in the currencies and look elsewhere for better trading opportunities.

Dale F. Doelling
Chief Market Technician
Trends In Commodities