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Tuesday, October 8, 2013

Here Comes The Warning Shot

Yesterday it was beginning to look like the market was starting to get fed up with the impasse in Washington; today it was confirmed. The market has now taken a shot across the bow, and if the government does not respond, we may start seeing some firing for effect in the next few days. Technically, we have now broken through two important support levels, and when it happened, the market went into free fall. We have no support that I can see above the S1 pivot point, ande now i appears likely we will head for that, bu at this rate, even that might not hold.

Crude oil is not playing along, and it is understandable why it would not:  despite the Fed shenanigans with the dollar, the primary driver here is still supply and demand. This is consolidating right under  the P pivot point and 50dema, and it might be ready to make a breakout attempt.

Gold is doing much the same, but it is somewhat more at he mercy of political game playing than oil is. However, this also looks like it is coiling up for a breakout.

The yield on the 10 year Treasury is doing just about the same thing here.  I would guess that it is far less liekly for this to make a breakout move, but it could happen.

The Dollar index continues to drop, with no support yet established. We may be seeing the start of the worst possible scenario: stocks and the dollar dropping at the same time. Loss in confidence in the dollar has not happened yet, but it could, and if it does, not much else will matter.

Obama is playing chicken with the American economy, but he may be about to piss off the wrong people, which is why I think a resolution will be found soon.

I will have the new highs update shortly. 

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