3 June 2008 - 17:39Market Commentary 6/3/08

Sorry for the long delay between posts, I admit that I have not made this blog a priority. Hopefully you have made use of the technical analysis now available on the site if nothing else in the interim. I am not surprised to see the stock market down in the dumps again after it’s double top formation last month. It bounced of Fibonacci support today which comes in at 12347 and this seems to be the only thing keeping it afloat at the moment. Certainly the exuberance affected by the Fed with their bail outs has worn off at this point and reality is sinking in again. With oil at $125 a barrel and companies reporting huge losses it is easy to understand why. Gold has been sold off big time on it’s rallies but keeps creeping up to be dumped once again, and looks like it will stagnate for a while in this pattern. In any case get used to gold at $800 an ounce or more for a long time to come.

Turning to currencies, Aussie GDP is coming out in a few hours and should give a good idea of the situation down under. With a whimpy .3% growth forecast for the measured quarter it will be hard to come in below that figure and I suspect that if there is any deviation it will be to the upside. Although this pair is on a downward bias today it is unlikely to break $.95 tonight unless the number is really terrible as $.95 is a strong support level. Although if it does it should be a very strong move pushing AUD/USD down to $.93 before you know it. Both AUD/USD and NZD/USD popped up last month, stalled out and have started to reverse. Any dovish wording in tomorrow’s RBNZ statement will only serve to fuel the decline which I am sure suits the RBNZ just fine.

As for the dollar in general it looks like it has finally found some support and earned some respect in general. Perhaps bears are just waiting for it to pop up a little bit more before selling it off to new lows. It probably wont be long now before the Fed intervenes again and sends into the abyss. Maybe they are just baiting in the suckers to buy the dollar before they do so. We all know that the Fed is owned by the banks who trade Forex so it  is a logical conclusion. Let’s hope for the cost of food and energy’s sake that they cease their meddling sometime soon.