Wait and See for GLD, But a Go Off This Low!

This morning we took a look at Gold and the Streetracks Gold Trust SPDR(GLD) on our latest www.thefredreport.com weekly conference call.
GLD has fallen as anticipated and come close to our downside target of 115 sooner than we expected. There are layers of support between 114 and 115 GLD. We expect these to be tested.

We note that weekly stochastics remain overbought in spite of this decline, and also note that the long-term trend remains up. This suggests that more consolidation, and not necessarily downside pressure, is needed before the next significant up move in Gold.

Over the longer-term, we continue to like Gold but expect to see choppiness over the next month or so. However, realize there is risk here -- Gold has outperformed commodities in recent weeks due to currency and market related fears, and could fall more if these fears abate.(more)

China's property market braced for 30pc drop

Stephen Green, the bank's China economist, said a glut of newly built homes were hitting the market just as buyers are restrained by higher down-payments and curbs on speculation. "We believe developers will be forced to cut prices," he said.

Kenneth Rogoff, ex-chief economist for the IMF, told Bloomberg Television in Hong Kong that the denouement could prove abrupt after such a torrid boom. "You're starting to see that collapse in property and it's going to hit the banking system," he said.

The government is trying to deflate the housing market gently, mostly using tools known as "financial repression" rather than Western style rate rises. Xu Shaoshi, land minister, said sales are already dropping. "In another quarter's time or so, the property market will probably come to a full correction and prices will fall. It's hard to say to what extent they will fall," he said.(more)

Totalinvestor Special Situation Trade

The Direxion Daily Financial Bull Shares seeks daily investment results, before fees and expenses, of 300% of the price performance of the Russell 1000® Financial Services Index (more info here).
Yesterday the financials had a strong day and this stock was up 12.4%.
The charts are telling us that there is a positive divergence between the stock price vs the RSI and MACD. Another plus is the stock broke through the previous recent lows around $20 on good volume.
One big negative is the 200 and 50 day moving averages have crossed and both trending down suggesting the primary trend is still down, so this is a short term trade for now with significant risk. ***Not investment advice***

McAlvany Weekly Commentary, July 7, 2010

The Importance of Turkey: An Interview with Kamran Bokhari

Posted on 07 July 2010.

About the Guest:

Kamran Bokhari is STRATFOR’s Regional Director of Middle East and South Asia Analysis. Mr. Bokhari has published numerous analytical, scholarly, and theoretical articles related to geopolitics of the Islamic world. Bokhari is also the author of a forthcoming book on radical/militant Islamist political thought, entitled “Voices of Jihad: New Writings on Radical Islam’.

To read one of his latest articles Click Here

Standard Podcast: Hide Player | Play in Popup | Download

Bubble, Bubble, Oil in Trouble

Oil prices rose Wednesday after six straight days of trading declines. Prices closed at $74.07 a barrel, up $2.10, or close to 3%, for the day. Still, prices remain down about 9% for 2010 and about 15% from their high-water mark of $86.15 a barrel, set in early May, just after BP's (BP: 33.19, +1.28, +4.01%) catastrophic oil spill in the Gulf of Mexico. That's a worrisome indicator for the pace and health of the global economic recovery.

Because crude prices reflect changes in energy demand, they're a good bellwether for growth, but a host of factors, from the spill and offshore drilling moratorium in the Gulf to a slowdown in China, have left oil prices without a clear direction. Energy experts say that as long as crude prices keep bobbing up and down like the tar balls washing toward Louisiana beaches, investors can expect few answers and a bit more pessimism. (more)

Buy Precious Metals and Rice as `Refuge,' Sell Bonds, Jim Rogers Advises

Investors should sell bonds and buy commodities like silver and rice as a “refuge” as the world economy may continue having problems, Jim Rogers, chairman of Rogers Holdings said.

“Bonds are not a good place to invest in,” Rogers said at a conference in Kuala Lumpur today. “You should own commodities because that’s your only refuge” whether it’s silver or rice, said Rogers, who predicted the start of the global commodities rally in 1999.

Gold has gained 8.3 percent this year, leading advances in precious metals, as investors seek haven assets to protect their wealth amid concern the global economic recovery will falter. Still, commodities overall capped their worst quarter in more than a year on investors’ concern that slower growth from China to the U.S. will sap demand. (more)

The Dollar Test

Last month technical analyst Chris Kimble gave us an interesting look at the Dollar in a rising channel. Today he gives us an update.

Chris comments: Just a short of a month ago, I suggested that the Dollar could "cool off" from its steep rise, on account of the strong overhead resistance.

In the past month, the Dollar has declined almost 4% and the oversold Euro has rallied.

Now the Dollar finds itself on a support line that dates back to December of 2009. This support line is the first big "test of strength" for the Dollar in the past 90 days.

As usual, the impact of what the Dollar does here, will have a sizeable ripple effect on many asset classes.