Oct 28
Time to Sell: a Look at the Charts
Posted by Kristjan Velbri | Posted in Markets | Posted on 28-10-2009
As you know, tomorrow is GDP day and we are expecting a pretty decent number, which could spark a rally (could≠ will). But traders are no fools and they will look beyond the headline number. If the GDP is positive only due to government spending and all other sectors of the economy are weak, then they are going to sell the market accordingly. Remember, GDP = consumption + government spending + trade balance (exports-imports) + investments. If government spending is the only force behind a positive GDP (that’s quite probably given the awful jobs, consumer spending and capital exp numbers), then there’s really nothing to support the market.
But enough talk. Here are the charts, which I think you will find quite dramatic. Gold is still a good investment as the bull market is still in full force, see more on gold here. LIBOR and TED spread are both doing okay right now, so I don’t see a crash coming just yet. This could change, of course.
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