Technical Weekly 1212

EQUITIES

Most indices seem to be running out of steam after the recent bullish weeks.
I suspect that the market has entered a short-term correction or may continue to trade sideways. The seasonally of the end of the year is normally bullish and the market seems to ignore the short term overbought conditions so that the mid-term bull market remains intact.(graph1 Euro Stoxx 50)















COMMODITIES

Gold(graph2) broke above 530$ surging 5% during last week.
Gold rose to a 24 year high as investors bought bullion as a hedge against inflation and as an alternative to stocks, bonds and currencies.
Gold is in a bull market in dollars and euros and yen and we have seen the recent run-up even as the dollar has risen.
Gold has jumped 21 percent this year, spurring a rally in precious metals including silver and palladium that is outperforming the Standard & Poor's 500 Index and 10-year U.S. Treasuries. Speculators more than tripled their net holdings of New York gold futures since July, and some central banks say they want to increase their gold reserves.The trend remains positive and shows no signs of slowing down but gold is now overbought on all time frames.(montly, weekly and daily graphs)














The Brent(graph3) closes over its 50 day moving average for the first time in more than 2 months and a break above the resistance line (red line see arrow on chart) will resume the uptrend.
Crude oil also bottomed in December of last year.

















GERMAN 10 YEAR YIELD

The bond market sold off on Friday as a series of hawkish comments from ECB members have built up lately, suggesting that the ECB could hike again.
The yield on the benchmark German 10 year bond is now approaching the 3.36 support area.
For now, I still not believe that this correction will go below this support zone and on the contrary I think that long-term rates will rise again.















EURO-DOLLAR

In the short term the rate continues to trade sideways between 1.17-1.19, but the long-term trend remains down.