Trading Time?

The All-One-Market is about to correct
It could be a tradable move

Bob Hoye
Institutional Advisors
Posted Sep 29, 2010

Gold and Silver Sector

• Recently, we have thought that one of the keys to change would be silver, and the outstanding action registered a daily Upside Exhaustion on September 20. A top was expected within the next six trading days and today is Number Five.

• The "exit" from silver would be prompted by a downtick on price or momentum.

• The Silver/Gold ratio also set some RSI readings from which a high would follow by a week or so. That counts out to this week.

• Gold, itself, has become a "Goldilocks" item whereby--as the Financial Post reported today--it is being recommended for "Inflation", Deflation" and "Hyperinflation".

• Over the past few days, gold and silver stocks have been underperforming the action in bullion prices and that often anticipates a slump in the sector.

Currencies

• The Dollar Index RSI reached 27.5 on Friday which is almost to the level that ended the decline in early August. A price reversal up through 80.50 would be considered confirmation of a turn.

Stock Markets

• Our Gold/Commodities Index (GCI) set its recent low at 354 on September 13 and, typically, the turn up has led the high on the NYSE senior indexes by 5 to 10 trading days.

• This is Day Ten and Friday's close on the S&P was a new high for the move at 1148.

• The key in April was 1217 and occurred on Day Six of the GCI count.

Wrap

The "sunshine" expected in September has been very good and the action is now facing a weather change. The money market has appeared to be "easy" with low rates for treasury bills and narrowing of spreads as represented by the Ted-Spread.

"Unusually" low rates for short-dated instruments in the senior currency have been one of the features of a post-bubble contraction. However, reliable signals have been provided by a change to steepening in the curve, which seems to have started and by a turn to spread widening.

In the past couple of days the Ted-Spread has widened a little.

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Sep 27, 2010
-Bob Hoye
Institutional Advisors
email: bobhoye@institutionaladvisors.com
website: www.institutionaladvisors.com