Friday, March 12, 2010

Weekend Review ~ Week Ahead

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On Tuesday it was highlighted that the XLF was approaching it's Oct high and needed to break out to rally the markets. ($SPX) >>READ  Below you can see that the XLF as well as JPMorgan Chase (largest position in the ETF) ran up against resistance as did the S&P500.

As for the US Dollar; it broke below the 80 level after finding resistance @ the Itz target of 81. The Euro rallied perhaps on short covering as reported on our Itz Twitter Updates. Now this should've rallied gold & silver and the other precious metals...but gold  declined $30 for the week...confused yet? At first the thought was that since gold in Euros had been making new highs, that European's that had entered gold on the 'Greece' debt fears, perhaps took profits as the worries subsided and the Euro rallied. Granted the problems of the Eurozone are far from over, but in the short term anxiety has come down. Or traders were rotating out of gold and entering equities on the test of 1150? Which ever gold was down and perhaps just tired, however longer term I expect the dollar to decline and inflation to trend higher.

Next week it seems likely that health care and bank reform will dominate headlines as important bills make their way through Congress. Senate Banking Committee Chairman Christopher Dodd has broken off talks with Republicans on a bipartisan bill and announced he will unveil a Democratic bill next week and bring it before the committee for debate and a vote. Congressional Democrats are drawing closer to agreement on a broad healthcare overhaul that could lead to a final vote in the next few weeks, but vowed not to be bound by White House deadlines.

The bills will probably make market & investors nervous in the hit short-term, ... but long-term  the any clarity should take stocks higher.

No change in interest rates is expected when the Fed meets Tuesday for a one-day gathering, but investors are looking for guidance on how much longer monetary policy will remain as loose as it currently is. That will play a key role in the outlook for shorter-dated Treasurys and the shape of the yield curve, the gap between the yields on near- and long-term maturities. Many say the Fed could replace its commitment to keeping interest rates low for an "extended period" with a different phrase that would give it more flexibility in conducting monetary policy should the economy, particularly hiring, pick up faster than expected. The shift would be read by investors as an affirmation rates are likely to start rising as early as September.

As for the Itz Pix Portfolio,  Market Vectors Gold Miner (GDX) was stopped out @ $45 & a 5.9% gain in a little over 6 weeks. Look for possible covered call strategies suggestions next week.

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