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
Friday, October 26, 2007
Thursday, October 25, 2007
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
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
Tuesday, October 23, 2007
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 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
Monday, October 22, 2007
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
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
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
Wednesday, October 10, 2007
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
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
Friday, October 05, 2007
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
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
Thursday, October 04, 2007
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
_____________________________________________________
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
Trends In Commodities
Tuesday, October 02, 2007
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
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
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