Sunday, December 6, 2009
What a week it was and between the Dubai news, economic reports and the all important Jobs Report. Last Sunday I noted; "Gold looks like it is also set to pullback, my near term target is $1075." ~link~ The dollar rallied and commodities sold off, gold more so than oil. However, this dollar rally maybe short lived? The unemployment rate declined to 10.0% from 10.2%. Granted the direction of the losses is improving, but how honest were those number reported? The reason the unemployment rate declined is because 98,000 workers fell off the survey because their unemployment benefits ended. Not to mention that the labor force participation rate declined to 65%, a new record low for this recession.
So...where are things at? I see the dollar possibly trending alittle higher (see chart below) and my downside target for gold is $1075, longer term I see it still heading higher. I continue to believe that oil ($WTIC) is heading much higher $90 to $100 in a few months, as I've posted numerous times on this blog. It echoes gold by 3 to 4 months and my near term support for crude oil is $73 as noted on chart below. I've been suggesting Transocean (RIG) and Pride Int'l (PDE) two drillers, I also like SU & and the OIH. Another sector that is giving a bullish signal is technology, although some might say...with Apple breaking trend that tech is in trouble. I disagree, just look at Intel's move this past week, Cisco is set to break out soon too. I recently suggested Juniper, see chart. My favorite tech stock remains to be RIMM, maker of Blackberry. Reason being it is way undervalued, it still remains a global leader in the business sector and with a global recovery coming, I believe it will outperform.
The last chart I have is of the Value Line Geometric Index, it is a better gauge of the market versus the S&P 500 ($SPX). It is equally weighted and tracks smaller companies impact much better than the $SPX or $DJIA. It too looks poised to trend higher after a pause here. One other sector that hasn't participated and taken some heat of late is the financial/bank sector. I suggested JP Morgan (JPM) and still believe that this sector is ready to rally and take the market higher. *Note as I type Live Spot Gold is trading at $1154.
*click on charts to expand images