Thursday, 28 October 2010

Pushing on a String

Markets did indeed peak on Monday, as expected. The quality of the subsequent decline is not impulsive. It is possible that Monday's highs will remain unchallenged, and risk will sell-off from current levels. It is equally possible that we rally once more, to challenge the recovery highs.

Looking at gold (here on an hourly chart), I expect USD to sell-off soon to set-up a base for a sustained rally (gold, non-USD FX, equities to rally). Turning points will once again likely coincide with market events, such as the Fed next week.

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