Archived IMT (2011.01.28)
IRAQ, GREECE, EGYPT, All cradles of civilisation acting as key catalysts to major market tops. THE LAST TIME THE Dow-30 had 8 straight weekly gains was from March to late April. That winning streak was interrupted in early May coinciding with the MAY 6 FLASH CRASH. This week, the Dow-30 will have its first weekly decline after 8 straight weekly gains....
SIX MONTHS FROM NOW (when QE2 is over) we may look at the 12,000 top in the Dow-30 and 1,300 top in SP500 and say "Yes, this was Egypt". Last May we saw at the Market top and said: "This was Greece". Markets ALWAYS need a catalyst (even though it may not a directly relevant to market fundamentals) and this may be it, as it risk lifting oil prices despite already rising bond yields and high unemployment.
US TREASURIES COMPETE WITH GOLD AND OIL ON SAFE HAVEN BUYING as both rally alongside US dollar on intensifying violence in Egypt and implications for MidEast policy & oil flow.
I expect the US dollar to retain these gains while metals to began a gradual retreat back as equity indices deepen their declines. We mentioned this week that the last time the Dow-30 had 8 straight weekly gains was from March to late April. The winning streak was interrupted in early may coinciding with the Flash Crash.
HERE IS THE SP 500 CHART WARNING I POSTED ON MONDAY:
Understand the Cycles, Stay Ahead of the Curve, Take Action