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Bonds, research analyst, gold, currencies
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The yield on the 10-Year note is between my annual pivot at 2.999 and my annual risky level at 2.813. Gold begins August between my quarterly value level at $1140.9 and my semiannual pivot at $1218.7. Crude oil ended July above my annual pivot at $77.05 with a new monthly pivot at $80.02. For the euro there’s a weekly pivot at 1.2823 and a weekly risky level at 1.3349. The Dow has declining MOJO on its monthly chart, rising MOJO on its weekly chart and overbought MOJO on its daily chart with annual, monthly and semiannual pivots at 10,379, 10,439 and 10,558. The Fed has paper profits in Bear Stearns and AIG securities – I say book the profits. The IMF says that twelve regional banks need to raise capital. Barron’s projects a decline in home ownership. I will be covering the banking system among other subjects at my presentation in NYC on Monday, August 9th at Bloomberg Headquarters at 5:30 PM.
10-Year Note – (2.909) This yield ended July between my annual pivot at 2.999 and my annual risky level at 2.813. We begin August with a weekly pivot at 2.882. Semiannual and monthly value levels are 3.479 and 3.601 with quarterly and semiannual risky levels at 2.495 and 2.249.
click to enlarge
Courtesy of Thomson / Reuters
Comex Gold – ($1181.5) Daily, quarterly, monthly and annual value levels are $1165.3, $1140.9, $1133.2 and $1115.2 with weekly, semiannual, weekly and semiannual risky levels at $1203.1, $1218.7, and $1260.8. Note the importance of holding the 200-day simple moving average at $1146.5.
Courtesy of Thomson / Reuters
Nymex Crude Oil ($78.94) My annual pivot is $77.05 with a daily pivot at $77.89, and monthly, weekly and semiannual risky levels at $80.02, $82.64 and $83.94. My quarterly value level is $56.63.
Courtesy of Thomson / Reuters
The Euro – (1.3034) Quarterly and monthly value levels are 1.2167, 1.1486 and 1.1424 with a daily pivot at 1.3046 and weekly and semiannual risky levels at 1.3349 and 1.4733.
Courtesy of Thomson / Reuters
Daily Dow: (10,466) My annual pivot is 10,379 with monthly, weekly and semiannual pivots at 10,439, 10545 and 10,558, and daily risky level at 10,621. My quarterly value level is 7,812. My annual risky level at 11,235 was tested at the April 26th high of 11,258.01 The 200-day simple moving average is 10,409. My quarterly value level is 7,812 with my annual risky level at 11,235, which was tested at the April 26th high at 11,258. This test marked the end of the bear market rally that began in March 2009. We are in the second leg of the multi-year bear market that began in October 2007 targeting 8,500 before 11,500.
Courtesy of Thomson / Reuters
Weekly Dow:The April 26th high of 11,258 was a test of the 61.8% Fibonacci Retracement of the decline from October 2007 high to the March 2009 low. Note also the failed test of the 200-week simple moving average now at 11,066 and the failed test of my annual risky level at 11,235. MOJO is rising and weekly closes above the 5-week modified moving average at 10,280 keeps the weekly chart profile positive.
Courtesy of Thomson / Reuters
Monthly Dow: shows declining MOJO (not shown on this chart), but July’s close was above the five-month modified moving average at 10,198 shifts the monthly chart to neutral. July’s close was also just above the 120-month simple moving average at 10,453.
Courtesy of Thomson / Reuters
The Federal Reserve now has a paper profit on the toxic assets it's holding from Bear Stearns and AIG. The assets are presently worth $69.1B, around $2B more than last quarter, with the unrealized gains on the Maiden Lane portfolios standing at $10.8B. I say the Fed should sell these assets to help establish a market that till now has been non-existent.
The International Monetary Fund (IMF) conducted their own bank stress tests and they conclude that the US financial system remains vulnerable to crisis, partly because Congress failed to streamline the regulatory system or take bolder action. The IMF indicates that among the 53 largest banks in the US there are regional banks that need to raise more capital.
Barron’s Projects Reduced Home Ownership over the Next Five Years – Instead of buying a home, Americans will opt to rent instead with home ownership declining to 64% in 2015. This will keep housing starts, new and existing home sales at best down 30% from where they were while homebuyers qualified to the $8,000 or $6,500 tax credits, which expired April 30th. Home ownership peaked at 69% in 2004 and will likely fall to the threshold of 1993 / 1994. Note that Barron’s shows that the Great Recession ended in 2009, but so far such has not been stated by the National Bureau of Economic Research (NBER).
Disclosure: No positions
Source: IMF: U.S. Financial System Remains Vulnerable to Crisis