The continued strengthening of the US dollar despite worsening US jobs and manufacturing activity, and broadening evidence of a sluggish China results from market realization that the Fed's shortened and sterilized QE (Operation Twist) deployed until year-end will be inadequate in addressing the unavoidable deterioration in global activity. As long as the presence of Operation Twist prevents any new QE program, equities rebounds should remain contained, commodities to probe further downside (led by oil until grains turnaround) -- all alongside a rising USD. Throughout, gold and silver compete for which is the preferred dead-cat bounce.
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It is no surprise for risk appetite to rally in April. After all, April is the 2nd best month for US equity indices as an average of the past 25 years. The charts below show the next threshold resistance for risk appetite. Notably, US100 faces a confluence of 200-DMA and trendline resistance around 24380-24440. SPX faces its 200-DMA at 6644. Gold needs to save 4640s, while silver is capped at a wedge resistance at 74.00.
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