Friday, May 2, 2008
Inverted H&S's are showing up in many different places. Two of these charts are the Asian ETF's/CEF's I mentioned. Until this morning I owned them both before profit taking. The other inverted H&S is on the 2 year yield. And of course there is poor old gold, sporting a head & shoulders top formation and threatening the neck line. Will it break and hold? Don't know don't care. All I know is that the global herds are driving markets toward some extremes that make sense to me. Dow/Gold ratio - sporting that inverted H&S of its own - NEEDED to reset to accomplish two things; 1) give real gold bulls the chance to re-buy some miners after selling the end of the world hype and 2) get some of those frightened stock market bulls thinking the worst is over. I wonder if Kudlow is crowing yet and if Fast Money is still laughing. I expect all these charts to begin reversals in the next few weeks.