Wednesday, August 13, 2008

Cramer & Markets

On July 30, 2008, Jim Cramer called the market bottom:

“My bottom call isn’t gutsy,” Cramer said. “I think it’s just a smart call that all the evidence points toward.”

“Bye, bye, bear market,” he said. “Say hello to the bull, and don’t let the door hit you on the way out.”
The next morning, the Dow Jones Industrial Average opened at 11,578. As of noon today, the DJIA fell like a hot knife through sleaze, dropping unceremoniously down through 11,500, hitting a low so far today of 11,453 putting all who bought Cramer's bottom signal under water.

So, what else is new? How about a reversal in Gold, Oil and the US Dollar?

GOLD



OIL


US Dollar



All of these charts are self-explanatory, Oil, Gold and the Dollar are all right up against longer term support or resistance and are primed for reversals of their respective short term trends. This presents some excellent risk:reward trades. If this trio breaks through and contines their shorter-term trends, you get stopped out and reverse your positions.

But the trade here is that they all are about to reverse, Gold and Oil from Down to Up and the Dollar from Up to Down. I cannot see the US Equity Markets going anywhere but lower with these three markets reversing at or around current levels.

A

2 comments:

Dave said...

Have you told Larry Kudlow about the dollar yet? He thinks it's only going up from here. Seriously though, I got long DRR (@ $40.36)as a short on the Euro vs. Dollar. What are your thoughts about staying with that trade since the Euro looks to only go down from here? It's been acting somewhat as a hedge against my oil & gas holdings.

Allan said...

Kudlow has reduced himself to nothing but a rah rah cheerleader for the u.s. markets, but i do give him credit for his cocaine use in the 80's.

as a hedge, no argument with holding drr, but not as a trade in and of itself.