Thursday, June 14, 2012

Waiting for next week's signs

Equity markets are consolidating. Both the SPX and DAX are sitting close to their 200-day MAs, awaiting direction from the Greek vote, European reaction and Fed meeting next week.

Meanwhile, the VIX is also close to its 200-day MA, also suggesting a 'finger on the button' kind of mode.

The Gold/Silver ratio is also at a key level.  This ratio appears to be more relevant/useful as a reflection of sentiment with regards to the market's perception of (expected) liquidity conditions at times of stress.
Definitely one to watch next week.

In the same vein, the Gold/WTI crude oil ratio, on the rise since the middle of March, has signaled a 'peaking' SPX. Will Gold/WTI move towards the levels seen in early October 2011, when risk sentiment bottomed out following a wild summer selloff? 

Market indicators seem to confirm a sense of heightened tension and anticipation at the moment. Let us see what next week brings.




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