Where to now for Gold?

Good morning all,

Well, here's the $64,000 question! Where will Gold go next? I'll give you the technical view since that's the only one that really matters.

DEC GOLD hit a new high of $802.80 overnight but is now trading at around 791.00. The market is certainly in overbought territory but I've seen too many overbought markets continue to rally without so much as a pause in its ascent. But the $800.00 psychological level is clearly proving a formidable obstacle. This may just be the point where the market says "No mas!" and starts a bit of a retracement. Some of my technical indicators are beginning to weaken as the market makes new highs and that is certainly troubling. Momentum oscillators are turning lower as well so don't be surprised if this market stumbles in the near-term. The long-term outlook remains unchanged. If you are just now starting to look at this market (what the hell are you waiting for?) buy APR GOLD futures and options at this juncture on dips or a breakout close above today's high. More later.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

This one really hurts!

Good morning all,

When you're in a business like mine you occasionally have friends, sometimes your best friends, ask you about the markets. My best friend, Phil, called me a few weeks ago and said he might be interested in putting some money into the futures markets and asked me what I thought. My response was hardly surprising and I told him that I've been advocating the long side of Gold for a long time. Gold had just had a day or two of downside action and I told him his timing may be perfect so get the account opened and get long. That was almost 4 weeks ago. Did my good friend open his trading account and get long Gold? Nope. Has the market rallied to new highs since that time? Of course! The funny thing is this missed opportunity has hurt me more than my friend because, from my perspective, you welcome the chance to be a hero to your best friend. So, this morning, Gold is up another $10 trading just north of $780. My personal experience tells me that Phil will finally buy Gold just before the market tops out.

What is Gold telling us right now? If I'm right it's telling us we're in big trouble. Do you remember the days of stagflation? Well, think worse than that. People ask me how I can advocate long positions in Gold and Bonds simultaneously. It's very simple. You buy bonds for the return of your principal (flight to safety) and you buy Gold just in case things fall off a cliff. Geronimo!!!!!!!!!!

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

Will Interest rates continue to fall?

Good morning all,

Since I'm going to limit my coverage of the Stock index futures until further notice I'd like to talk about some other markets that I trade regularly. Interest rate futures (Bonds, notes, Eurodollars) have been a staple of my portfolio for over 20 years. When I first started trading these markets they were pretty much the only thing that I traded. I focused all of my studies regarding Technical Analysis on the moves in Interest rates. They are just as appealing today as they were back in the 80's. I've long been bullish on these prices as I have continued to evaluate the health (or lack thereof) of the economy. I know, I know! Everyone on CNBC says the economy is fine! Well, what the hell do they know? You simply cannot have yields at the levels that we are seeing today and have a robust economy. It simply does not happen. So I will continue to reiterate my forecast (God, I hate that word!) on the 5-year note. Before the trend in rates ends we will see the 5-year note yielding 3%. The yield range on the 5-year note for the week has been roughly 3.95% to 4.02%. Prices in the markets are currently dealing with some overhead resistance and it may take some time for them to break out to the upside but I have no doubt that it's just matter of time. So, you may want to wait for a pullback, much like I've been advocating in the Gold market for quite some time. Gold and Bonds. Buy 'em while you still can because they won't be at these levels for long.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

The DOW continues to confound.

Good morning all,

The DOW could not confirm Friday's close below the 100-day MA yesterday which leads me to believe that there may still be some life left in the equities markets. The DEC DOW contract is up 45 this morning and, one thing is for sure, the higher the market goes now the larger the correction will be later. Show me someone, besides myself, that isn't BULLISH! There's just way too much complacency which will eventually lead to a mass exodus and, as Ralph Acampora recently said, "a buying boycott". When that happens you'll need to be ready because you want to be SHORT as soon as possible in order to take full advantage of the carnage that will ensue.

Gold gave us another great buying opportunity yesterday as the Dollar tried to rally off of extremely oversold conditions. I know how hard it is to step up in these sharp selloffs but it's the only way to play Gold right now. If the market breaks hard, as it did yesterday, you simply BUY AT THE MARKET. Be alert and stay tuned!

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

The Technical picture on the Dow.

Good afternoon all,

With overnight weakness in the global equities markets it sure looked like stocks in the U.S. were going to puke hard today but, so far, the selling has dried up and the DOW is now trading in positive territory. But the fact remains that the cash DOW closed below its 100-day MA on Friday and is trading just below that level (13,557) today. If we get consecutive closes below the 100-day MA then I'll be SHORT the DOW once again because that will be all the technical damage necessary to turn stocks lower at this juncture. If that occurs it will signal that this rally, which began on 8/16/07 when the DOW broke the 200-day MA by a large margin only to rally back and close above the MA, has come to an end. I'll wait for the close and post my trading strategy then.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

Will history repeat itself?

Good morning all,

I was talking with a friend and client on Friday about the activity in the stock markets and he asked me what I was doing on October 19, 1987. I told him I remember that day as if it was last week. I was in the Financial planning business back then and I was just beginning my study of Technical analysis. My reasoning behind getting out of stocks completely on Wednesday, October 14th, was more of a gut feeling or premonition that something big was about to occur. I told my wife that we were packing the bags and taking the kids to Disney World that weekend because I didn't even want to think about the markets. The Dow was down in excess of 100 points on Friday, October 16th, and I was now convinced that the coming week would bring an event that would live in our memories for years to come.

On Monday, we had spent the entire day at Mickeyland and we were in Epcot Center when I noticed a large group of people milling around the TV monitors so I could no longer restrain my curiosity. I made my way through the crowd and there I saw the headlines - "Dow down 508 points". It was a feeling that, to this day, is indescribable. My wife, who knows me better than anyone, knew better than to make a big deal out of the fact that I had predicted an event like this. She already knew I had plenty of ego already so she played it down like only she can do. I didn't really feel all that good about it because I knew that this event had caused a lot serious damage to people's net worth. All I knew is that my clients were safe from the destruction that had occurred and we'd all just have to wait and see what the ultimate effect on the economy and the world would be.

So this brings us to 2007, 20 years after the fact. This past Friday, October 19th, the Dow was down 366 points and the overseas markets are down sharply this morning with the DOW futures down 105 points at 7:30 AM EST. Will the markets experience another meltdown today? I don't know for sure but if you're a regular reader of my blog you know that I have been looking for a catastrophic event that would put things in motion for a protracted period of volatility and carnage in the financial markets. Maybe this will be the catalyst for that event. We'll just have to wait and see.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

Nobody's right all the time!

Good morning all,

Well, the Stock index futures continue to move ahead and, more importantly, the DOW futures made a new contract high in conjunction with the new all-time closing high in the cash market. So, for now, I'll be standing on the sidelines in these markets waiting for the signal that it's time, once again, to get SHORT. If you look at what's actually keeping these markets afloat it's extremely hard to make a bullish case for stocks but the markets rarely trade in a logical fashion.

The good news is that Gold remains firmly entrenched in its current bullish trend and our target for $800 by year's end remains intact. The downtrend in the Dollar continues and this will obviously provide more fuel for the Precious metals markets. We've been long the Interest rate futures and maintain our target of a 3% 10 yr. note yield during 2008.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

How will the markets finish the day?

Good morning all,

The early response to the jobs report in the Stock index futures, the Dollar, the Precious metals and the Interest rate futures is hardly unexpected. The report was a bit stronger than I expected but hardly at levels that insures that the markets are out of the woods. I'm going to sell 14,150 in the DOW and, if the market closes above 14,165 I'll exit my trade, take my medicine, and reevaluate the market. This is a calculated risk trade that I can't turn my back on. There's a fairly high level of risk in the trade but the reward could be spectacular. Let's watch the market action and I'll update this blog after lunch.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

A possible scenario for tomorrow's markets.

Good afternoon all,

Well, today's market action in the Stock index futures may just be the calm before the "Perfect Storm" that I've been harping on for the better part of 2 years. So, I just sent the following letter to my good friend Jon Nones, Deputy Editor at ResourceInvestor. I know Jon won't mind that I have included the entire text of my email here. If you haven't, for whatever reason, visited the ResourceInvestor website I highly recommend that you do. You'll find some very insightful articles on the entire spectrum of commodities that we trade. Tell them I sent you!

Dale F. Doelling

_____________________________________________________

Hi Jon,

I know you don't focus much on the Stock Index futures but I have literally traded the DOW futures contract from day one. I have been extremely bearish on stocks for what seems like an eternity and, believe it or not, I've managed to not lose money being short the DOW over the last couple of years mostly because I've been extremely nimble in my approach.

What I wanted to point out to you is what could possibly happen tomorrow if the Employment report shows any additional sign of weakness in the economy and the jobs market. As you are probably aware, the DOW cash closed at a new high on Monday but the DEC DOW futures failed to do so. The previous closing high was 14,165 on 7/19 and Monday's session closed at 14,157. What we are looking at is a possible MAJOR DOUBLE TOP in the DOW futures as the DEC contract was unable to provide confirmation to the new high in the cash DOW. If we get a lousy employment report tomorrow I would not be surprised to see a massive selloff in the 500-800 point range which would then open the markets up to a serious drubbing next week. I've been in this business a long time and that "Perfect Storm" that I've been talking about, ad nauseum, may be ready to make landfall.

Regards,

Dale F. Doelling

President and Chief Market Technician
Trends In Commodities

Where's the new closing high in the DOW Futures?

Good afternoon all,

Well, this may sound a bit obstinate but it's the truth. We SOLD the DEC DOW yesterday at 14050 and then watched the market move higher right to the closing bell. New highs? Not from our perspective! The DEC DOW contract high came on 7/19 at 14,190 and closed at 14,165. Yesterday's high was 14,195 but closed at 14,157. Now, I know there are a lot of people saying that it's only a matter time but the fact remains the the DOW futures contract has FAILED to notch a new closing high on the daily chart and, considering the massive yawn the market displayed today, I believe that we're putting in a major DOUBLE top here. The complacency on Wall Street is at nosebleed levels and that's always a sign that something major is about to occur. So, I'll remain SHORT the DOW and see how this whole thing plays out. I just hope that, at the very least, you're sitting on the sidelines and aren't LONG this market. A lot of people are going to get caught with their pants down and the end result won't be pretty.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

Is the Dow rally for real? Don't bet on it!

Good morning all,

So, here we are. The DOW futures are trading just below the 14,000 mark after an intrady high of 14,036. My order to SELL the DOW lies at 14,050. There's an old saying that if the market allows your limit order to be elected the trade is probably a bad one. That's a little early morning trading humor for you. It's always a little frustrating when your order is left in the dust by the market but it happens. We're at extremely lofty levels here so you may not want to wait to get SHORT. I may have to take that advice myself if the market doesn't show some sign of a rally to a new intraday high. I'll be patient for now but I may be forced to reevaluate my position. Stay tuned!

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

Mid-week update

Good morning all,

It's Wednesday and the DOW is currently trading above the 13900 level which means I made the right choice in exiting my SHORT position yesterday. This market is puzzling to say the least. I don't like to bring up fundamentals but the news just keeps getting worse yet the stock index futures find some way to move higher. From a technical perspective this is actually quite positive. So the only question left is why am I not bullish on stocks? The answer to that isn't as simple as you might think. I'm not normally a pessimistic person but I get uncomfortable when I see situations that occur, especially in the financial markets, that are swept aside as if they are of little consequence. The current debacle in housing and the commercial paper markets is just the tip of the iceberg and is anything but inconsequential. It's going to take time to realize the full nature of these events and I can't see how the markets can continue to ignore the potential fallout that I still believe is going to occur. Just look at Gold and then ask yourself why it's continuing to rally if all is right with the world. As I'm fond of saying, we'll just have to wait and see how this whole thing plays out.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

We'll sit and watch, for now

Hello all,

While I was writing my last post the market moved through the previous high at 13848 and is now just 6 lower on the day at 13856. I'll just monitor the market for now to see if the momentum traders use this as an excuse to BUY the market. If there's no follow through, I'll be looking to get SHORT once again.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

DOW Update

Hello all,

Since the volatility is likely to pick up this week, I'm not going to let my profits on this DOW trade evaporate before my eyes. So, in order to protect myself and my profit, I'm placing a protective stop at 13851 which is 3 tics above today's intraday high. The way I see it, if the market does make a new intraday high, the odds of the market continuing higher increase significantly on the breakout. I refuse to fight the market at this point because the trend is still very questionable and the volatility, as I mentioned earlier, is likely to increase over time. Also, there are still a lot of traders holding on to their "wishing and hoping" that all is right with the world and they'll be waiting to jump all over a breakout to the upside.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

A standing ovation for standing orders

Good morning all,

I decided to place a limit order in the DEC DOW futures yesterday in spite of the fact that I was not going to be monitoring the markets very closely while I was trying to take some cash from my son on the golf course. But I still had this hunch that my timing was right regarding the failure in the DOW futures that I wrote about yesterday morning so I placed a limit order to SELL the DEC DOW at 13951 with a 50 point STOP. My SELL order was elected shortly after the cash markets opened and the high was made during that 30-minute bar on the chart. The DOW retested the day's high of 13963 about an hour later but was unable to move through that level. The market has been working lower ever since that double top on the 30-minute chart. We are now trading down 50 points 9:45 AM (13,812) and I won't be surprised to see the market significantly lower by the close.

The Gold market, currently at 736.00 basis DEC, is seeing some selling pressure in spite of a lower dollar. This just gives those who have been wringing their hands hoping for a retracement a chance to buy at a slightly better price. Don't let this opportunity pass you by! More later.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

DOW at a crossroads!

Good morning all,

Well this is where things should get interesting regarding the DOW futures. The DEC contract hit its contract high back on July 19th at 14190. The DOW then fell 1,500 points to an intraday low of 12,680 on August 16th. We now find the DOW trading just above the June 1st high of 13,917 and in significantly overbought territory. In spite of the fact that all of the talking heads on CNBC believe that the economy is out of the woods and life is beautiful once again, I can't help to think that this A-B-C retracement rally, powered by a .50% rate cut by the FED, is going to fail miserably. I guess we'll just have to wait and see but I won't start selling the DOW futures just yet. Why? Because I'm going to play golf with my son, Brian, today. I love to trade and fatten my account equity but I love spending time with my kids even more! You only live once!

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

Gold - Looking Good!

Good morning all,

DEC GOLD is trading slightly below Tuesday's high of 735.50 but the uptrend is healthy and I believe this market is ready to kick it into high gear. Keep your eye on the DOW futures today. I won't be surprised to see a positive day in the Stock index futures but there will be a hangover from yesterday's rally so look for the markets to stumble as the euphoria from the interest rate cut starts to wear off.

A logical scenario would be to see a rally up to but just shy of the all-time highs then a major drop in stocks across the board. The only question is how close will they actually get to the previous highs. My guess is that the indexes are only a day or two away from failure.

A fairly safe play, in my opinion, is in the treasury markets. We could see the 5-yr. notes yielding 2-2.5% by the first quarter of 2008 and that means big profits for those of you long Treasury futures. Stay tuned.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

Don't be fooled by the stock market rally!

Good afternoon all,

I apologize for the delay in putting this on the blog but it's been a very hectic week. So, I know you're all wanting to know about the Stock index futures and the big rally today. Well, all I can say is that it's hardly surprising that the equities markets would rally after the FED cuts both the DISCOUNT rate AND the FED FUNDS rate by 50 basis points. Is anyone listening to what the FED is saying? Did anyone see the early morning headlines regarding foreclosures or the builder sentiment numbers being the worst on record? Then get the FUCKING WAX out of your ears and OPEN YOUR EYES! If all is well with the world then why is GOLD rallying sharply on the news of the FED rate cut? Because all IS NOT well with the world!! Gold is probably headed for the all-time highs above $800. I just hope that it's done in an orderly fashion so the trend can be sustained until we reach the $1,000/oz. mark. More later.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

How high will Gold go?

Good afternoon all,

First, I'd like to mention that my recent study of Gold is complete and the first 50 people who send a blank email to dale@daledoelling.com will receive a free copy.

Second, DEC GOLD made a new contract high today and that is very significant for the market. Now, if you're just now starting to look at Gold as a momentum play you're probably wondering if the train has left the station. In my humble opinion, we're only in the 5th inning of this game. Where will Gold eventually top out? That's anyone's guess. But as long as we're guessing I believe that Gold will eventually top $1,000 and may hit $3,000 before it's all said and done.

Just remember to use common sense when trading the Precious metals markets and only use an amount of leverage that you are absolutely comfortable with. From ETF's to the futures and options markets, there's a level of risk and leverage available for everyone. Just take a position in something NOW!! Stay tuned!

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

Did you take my advice?

Good morning all,

Well, I handed you this whole scenario on a silver platter! Did you take my lead and BUY GOLD and SELL the DOW? I certainly hope so because on August 14th I said BUY GOLD and we've been buying since that time including the temporary dips that ensued. Now, DEC GOLD is testing the contract highs at $718. That's a huge move but I believe it's just the beginning. Gold's allure will increase as the financial markets continue to come unraveled. Then the panic will push Gold to all-time highs in quick fashion.

We've been very bearish on the DOW and today's action, down 215 right now, should pave the way for a break of the previous lows which will set off a chain reaction of monumental proportions. There's all kinds of ways to make money in the markets but, unfortunately, a lot of people simply can't understand the Futures markets, believing them to be too esoteric for them. Some just can't make the choice to participate when their inner voice is telling them to jump in. That's unfortunate but true.

We'll be here if you need us. In the meantime, enjoy the action because you ain't seem nothing yet!

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

Patience can be a virtue!

Good afternoon,

For those of you who subscribe to our real-time service, you saw a good example yesterday of why you don't SHORT a market when it's in full-blown rally mode. Yesterday I wrote here that 13450 seemed to be the place where we'd look to SHORT the SEP DOW futures contract but, when the market hit that level yesterday, it was clear that the market had built some momentum and looked like it wanted to press higher. And it did. We SOLD 13500 instead and that trade turned out to be a thing of beauty. We covered at 13300 today for 200 points of pure profit. This may have been a mistake as we move closer to the jobs report on Friday. The market looked like it was going to stage a brief intraday rally but nothing much became of it. So, with the DOW having just made a new low for the day, this could turn out to be a good example of a terrific entry on a trade followed by a premature exit. All we can do now is sit here and see if the market shows any sign of a rally. If that doesnt' occur, we'll have to just get SHORT again. Stay tuned.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

Gold's rally signals trouble ahead for the markets

Good afternoon all,

I hope you had a safe and enjoyable holiday weekend. The DEC GOLD contract is trading sharply higher again and this signals pending doom for the stock markets as we head into September. I won't be surprised to see Gold breaking through previous resistance levels this week and then surging to new contract highs as the momentum players pile on.

The DOW 13450 level, basis the SEP contract, seems to be a great area to go SHORT as the market simply has been unable to move significantly above this level. If the market can make it to this level again today, as it did on Friday, I'll be selling the market with a goal of at least 100 points on the trade as we made on Friday's trade from this level. But, eventually, the DOW is going to experience the next big wave down and this, of course, will be the time to simply get SHORT and STAY SHORT. Stay tuned!

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

Another opportunity!

Good morning,

With FED Chairman Bernanke waiting in the wings hoping to make all Americans feel all warm and fuzzy, we have another opportunity to SELL stocks. The DOW futures are up by triple digits at around 13400 and I'm just waiting for the sign that this most recent attempt at a rally has failed.

We've got the long weekend ahead and, should the market indexes close lower today, we may see the markets come completely unraveled next week. Stay tuned!

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

Surviving the markets

Good morning,

If you don't subscribe to or read The Economist then please take a moment and click the link to go to their website. I've been reading this magazine for more years than I can remember. I'd have to say that if you forced me to choose just one magazine that I could read I'd have to choose this one. In the 8/18 issue there was a terrific article titled Surviving the Markets on page 9. One line in the article really stood out. "Because the crisis taps so deeply into the newly devised structures of finance, anyone who say the worst is definitely over is either a fool or someone with a position to protect". Absolute Genius! How long has the National Association of Realtors been telling us that "the worst is over" and NOW is absolutely the best time to buy! Do you think the folks at the NAR have a position to protect? You betcha!

The talking heads on Wall Street keep saying this is "just a correction" in a bull market. If they would only tell us where they buy their crystal balls from! Nobody knows where the markets will be tomorrow, next month or next year. All we can do is follow the major underlying trends. The underlying trend in stocks is now DOWN. Follow the trend and make lots of money. Why make it harder than it has to be?

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

What's that smell?

Good afternoon,

Well, I'd be lying if I said it's not been fun watching the talking heads backpedal and try to explain why the stock markets have continued to retreat in the face of a "fundamentally strong economy" whatever the hell that is. I've heard about all the bullshit that I can take from these idiots.

The consumer is suffering from withdrawal from the credit "orgy" that's been taking place over the last few years and our artificially supported standard of living in this country is about to get "whacked" big time! The pain is going to become unbearable and the FED is finally coming out of the ether but it's just too late. I know I sound like a broken record but it's for your own good. You have to protect yourself, your family and your money. I only hope that you've taken my advice and sold your stocks, bought some gold and paid off your debt. We'll just have to wait and see how bad this economy spirals out of control. I'm betting it will be far worse than anything that we've seen in my lifetime.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

R-E-C-E-S-S-I-O-N

Good afternoon,

The stock markets were looking soft in the early going but rallied into the early afternoon only to be sucker punched as it headed for the closing bell. The current wave should take us below the March lows, at the very least. With everything that's happening in the financial markets, the most devastating blow will materialize in the form of a confidence crisis. The consumer is experiencing a hangover of monumental proportions due to easy credit and rising real estate values that came to a screeching halt. A lot of people are in a tight spot and there are going to be a lot of cable TV disconnect orders and cell phones turned off due to layoffs in the financial sector. These people have gone to the well once too often only to find that the well has run dry. This is going to go way beyond belt-tightening. This is going to be a tremendous contraction in consumer spending and there's not a damned thing the FED or anyone else can do about it. So, do yourself a big favor if you haven't done so already. Liquidate your stocks and conserve cash and you might just survive the financial tsunami that is about to hit the mainland.

Dale F. Doelling
Preident and Chief Market Technician
Trends In Commodities

More on the Precious metals markets

Good morning,

There's been plenty of volatility in the Precious metals markets and that's certainly to be expected. I'm trying to keep this blog up to date but there are only 24 hours in the day and it's been very hard to keep this blog current.

I wrote on August 15th that I was adding to my position in DEC GOLD below $675 and, when the price broke through the 7/5 low of $659 I stepped up to the plate and swung for the fences by taking a sizable position on the break. The market action on 8/16 was a classic selloff taking the market down far enough to hit the stops below the 6/27 low of 653.50 only to finish the session back above that support area which led to the sharp rally the following day. This was, quite simply, a market that had been stretched too far. With my technical indicators all signaling that a sharp rally was near I jumped in with both feet. As I write this the market's trading around $676.50 and I believe that a breakout above $700 will occur in the not-too-distant future. If and when that occurs, DEC GOLD could easily eclipse the April highs at $718 making $800 the likely next step as it continues its climb towards the $1,000 mark. Stay tuned!

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

The FED moves!

Good morning,

Yesterday's market action was, well, volatile. Today's market action will be a carbon copy of yesterday's. Yesterday, FED Governor Poole said there's no need for the FED to act on interest rates. The DOW fell 340 points only to rally back to almost unchanged. The market is down sharply again this morning and then, WHAM, the FED cuts the Discount rate by 50 basis points. Hmmm. No need to lower rates but, what the hell, we'll cut rates anyway. Now, it was the right thing to do as far as I'm concerned but it's too little, too late. Frankly, the FED doesn't have enough ammunition to ward off what's ultimately going to be the end result to the 5 years of abuse in the mortgage and real estate markets.

I've continue to buy Gold on these violent dips and I'll continue to SELL the DOW on these reaction rallies to events such as the one we've had this morning by the FED. I think it's easier to buy Gold on these dips than it is to SELL the DOW because the stock markets have been beaten up pretty good. There could be a very sharp rally off the interest rate cut so be careful. The market will tell us when the rally is done. Stay tuned!

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

The DOW's current technical picture

Good morning,

I mentioned yesterday that I thought the DOW probably would see some kind of relief rally because the market has gotten fairly oversold and it just makes sense to me that the market is not going to just step into the abyss without a fight. So I covered my SHORTS this morning when the cash market was trading below the 13,000 level. It looks like that decision was a good one. But, more importantly, I took my own advice (which I ALWAYS DO!) and was an aggressive BUYER of DEC GOLD futures below 675.00 this morning and the market is now trading at 680.70. So, both strategies have fattened my account equity nicely!

With the DOW cash now trading up about 42 points I'll simply wait for a sign that the buying is done and the market is ready to capitulate once again. That could happen in a few hours or a few days but I have no doubt that it will happen. Stay tuned!

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

Start buying the metals NOW!

Good afternoon,

Well, I don't have to tell you what happened in the stock markets today. It was another bloodbath. But I have to ask myself, what's the matter with the Precious metals markets? Well, the answer is simple. Even after a nearly 1,000 point decline in the DOW, your average Joe is still holding on to the hope that all is right with the world. Folks, if you believe that then you probably still believe Bill Clinton "never had sexual relations with that woman, Monica Lewinsky". Now, the markets have been kicked in the guts and there could still be one last stand by the bulls. But, I believe that it will last for only a couple of days, just long enough to convince enough people that things will be OK and that Moses will make a encore performance and deliver investors from financial persecution and guide them to the promised land.

Just in case Moses is a no-show, I suggest that, if you haven't already, you start taking small positions in the Precious metals markets. No mining shares. Buy futures, options or even the physical metal itself. As a matter of fact, buy some gold, to have and to hold, because it could come in handy when the markets really go cold. If you are still holding stocks there may be one last chance to dump them at higher prices but don't let the thought of a few extra bucks keep you from doing the right thing. Stick a fork in 'em because stocks are DONE! Cash is going to be a precious commodity. Pay down your debt in whatever way possible and hold on to your hat. Things are about to get really ugly. All the cosmic tumblers have fallen into place to provide the fuel for the Perfect Financial Storm.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

Update on recent FED action

Good morning,

I thought it would be a good idea to post additional comments regarding the FED and what they should be doing vs. what they are currently doing regarding the credit crunch that we're currently experiencing. The so-called experts continue to tell us that all is well and that there's no need for the FED to lower rates. Injecting liquidity into the banking system, as the FED has been doing until today, will be sufficient to keep the system afloat. Well, I happen to disagree and that's certainly my prerogative. The facts, as I see them, don't support the theory that this crisis can be contained by the recent actions by the FED. We have never, at least in my life, dealt with a situation like the one we currently have in housing, credit, and financial markets in general. There's no crystal ball that can guide us or give us a look into the future. I was speaking with a friend of mine the other night and I offered my favorite analogy for events such as the rapid acceleration in real estate prices from 2002-2006. The farther you stretch the rubber band the more violent the reaction when it snaps back. Sometimes the rubber band breaks when it has been stretched beyond its capabilities. That may have occurred and nobody has recognized it. Because it hasn't happened before doesn't mean it's out of the realm of possibilities. Well, the DOW is down 156 points at 11:16 AM this Tuesday and the market certainly seems to be telling us that all in NOT well in the world. It will be interesting to see what happens when we revisit 13,000 in the DOW. We'll stay short until the market tells us to do otherwise.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

For once "The Donald" agrees with me!

Good afternoon,

Donald Trump just agreed with me! He just told the talking heads on CNBC that he thought we would see a recession in this country and soon. He also said the FED should lower interest rates by a full point NOW! I happen to agree with HIM! Let's see if any of this actually come to fruition.

ALERT - The FED is actively adding reserves to the banking system according to the newswires. They need to do much more but they'll always be way behind the curve because they're bureaucrats.

So, there you have the final word from two of the world's greatest financial minds (egos?).

The markets have been relatively stable although sharply lower as I write. DOW futures are down 190 as I write. Once we crack 13000, it could be a quick slide to the 10,000 level wiping out the entire year's gain. We'll see how it all plays out.

Regards,

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

TGIF!

Good morning,

First, I would like to send out a Happy Birthday to my friend Phil Sullivan. I'll be firing up a fine stogie in your honor later today! Have a great day!

It's 5:41 AM EDT and I'm wondering about what might happen in today's trading session. When I submitted yesterday's entry the DOW futures were only down about 180. We all know what happened next. The Dollar/Yen is trying to stabilize but I think it's just a temporary respite as the market just challenged 118.23 and failed miserably. The DOW futures are down 68 right now but that can change in the blink of an eye. If the equities markets show signs of another meltdown the Dollar should follow. It's going to be a long, hot summer as we continue to see the credit markets disintegrate before our eyes. All the "newfangled" products that took all of those mortgages that weren't worth the paper they were printed on have all turned ugly and those left holding the bag aren't too happy about it. These investment turds are really stinking the joint up as more bad news related to the sub-prime market comes to light. Caveat emptor! Buyer beware. It's a cruel world out there especially in the financial markets. There are plenty of con games still in play so please be careful.

Regards,

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

The Dollar revisited

Good morning,

The Dollar is in freefall today vs. the Yen as we continue to move towards financial armageddon. If you've followed my writings you know that I have been extremely skeptical about the stock market rally that has occurred over the last year. But you have to understand that the market will always hurt the greatest number of participants and that time, in my humble opinion, is imminent. If you have any doubt just look at the housing debacle that we're currently experiencing. I moved back to Florida in January of 2005 just in time to witness the hysteria that was taking place in the Real Estate markets, not only in South Florida but in most areas of the country. I worked alongside people that were heavily involved in the industry and they believed, with all their hearts, that they had found the "Holy Grail" and nothing could keep prices from going up, up and away! You had people getting mortgages that didn't have a nickel to rub against a dime and speculators that never even considered the possibility that real estate prices COULD actually go down. "Flipping" had a whole new meaning and you must have been a recluse if you weren't doing it too. Situations like this can have only one result. A meltdown has occurred due to easy credit and historically low interest rates. Don't even think about a bottom in this market any time soon. I believe the worst is yet to come and it WILL eventually spread to other areas of our economy which will put us into a deep and prolonged recession. When the Presidential election rolls around we may be hard pressed to find a candidate willing to take over the mess that they will have to inherit from one George W. Bush. This man has been "bush league" from day one. He's taken incompetence to a whole new level which we haven't seen since the days of Jimmy Carter. Please forgive me for going off on a tangent but we, as citizens, must put aside partisanship before we lose EVERYTHING that we have worked for in this country.

That's it for now. DOW futures are down 170 but don't turn your back on this market if you're short like me.

Regards,

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities

I'm back!

Hello all,

Well, I've been on an extended hiatus from writing commentary on the markets. There are many reasons for my absence as I've been busy moving my family into a new home, getting my son acclimated to Florida (again!) and doing a little undercover work in an industry that needs a serious kick in the ass.

I haven't been neglecting the markets. The volatility in the Stock Index futures is off the charts and, for those with a cast-iron stomach, there's a lot of money to be made there. Just don't turn your back on the market for more than a few seconds or you'll likely get a very unpleasant surprise. I've offered some market comments recently to my friend, Myra Saefong, at Marketwatch.com for her Commodities Corner column but that's been about it.

So, I'll be ramping this blog back up over the next few days so let me know what you'd like to read about and I'll try to accomodate you.

Regards,

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities