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  • FTSE Double Bottom

    Background - Indices across the world have been selling off for 3 months now. The last few days have witnessed price action typical of a bottom formation.

    Technical view - FTSE futures have made a double bottom on the daily chart and have followed it with a base breakout. Although there is resistance at 5500 that needs to be cleared on the daily chart, a look at the intra day chart is more revealing.

    static.cdn-seekingalpha.com/uploads/2012...

    The intra day chart of FTSE futures shows heavy buying coming in the last hour of cash market trading in Europe. This kind of price action is typical of bottom formations and signifies institutional buying at these levels.

    static.cdn-seekingalpha.com/uploads/2012...

    FTSE 30 min

    This sets up a very low risk long entry in FTSE futures with an initial target of 5780.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in Z over the next 72 hours.

    Jun 12 1:46 PM | Link | Comment!
  • Gold Alert

    Background - 01 June 2012 marked the release of Non farm payrolls for the month of May, widely regarded as the most important news of every month. Many trends in the financial markets tend to start or reassert after the release of this piece of data. Gold has reasserted its long term trend this time.

    Fundamental view - The May employment report shows the US economy slowing sharply. Globally, the data from the euro zone and the emerging markets has been disappointing to say the least. This opens the doors for a new round of monetary easing from central banks across the world. With the data from US disappointing and the dollar at multi week high, gold is the safe haven where investors will look to find shelter.

    Technical view - The rise of gold had been unabated from Nov 2008 to Sept 2011 with the uptrend clearly marked by a trend-line on a weekly chart. Last nine months have seen gold consolidate and range bound.

    static.cdn-seekingalpha.com/uploads/2012/6/3/1004836-1338772782976517-Basis-Point_origin.png

    On Friday, 1st June after the release of non farm payrolls gold has rallied from the low of the consolidation range on high volume. This sets up a low risk chance to join the long term uptrend of gold which should lead to the first target of 1795$ and potentially all time highs.

    static.cdn-seekingalpha.com/uploads/2012/6/3/1004836-13387728831066628-Basis-Point_origin.png
    Gold Daily

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in GOLD over the next 72 hours.

    Jun 03 9:24 PM | Link | Comment!
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