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SCHEDULED GUESTS FOR TUESDAY, January 8, 2013

3:45pm Central:

Segment 4 – Anthony Cherniawski, Chief Investment Officer – www.thepracticalinvestor.com

CLEAR CHANNEL DALLAS – KFXR/1190-AM And Streaming Live @ www.yorbamedia.com

Good afternoon!

Gold dropped beneath its mid-Cycle support/resistance line and its 200-day moving average at 1663.18 last Friday. Yesterday it bounced but failed to achieve a position above resistance. We are now in the decline that I was looking for in mid-December. Two serious bearish pattern are waiting for activation. The first is the Orthodox Broadening Top, with a bearish trigger at 1625.00. The neckline at 1575.00 has even more bearish implications.

There is a lot of wishful thinking about the price of gold going higher. Bloomberg carried an article today, stating, “Assets held by Japanese pension funds in gold-backed exchange-traded products may expand to 100 billion yen ($1.1 billion) by 2015 from less than 45 billion yen at present, said Itsuo Toshima, who represented the Tokyo office of World Gold Council for 23 years through 2011.

This may indeed take place, but government bureaucracies are very slow to act.

 

Despite QE4, the bond market has broken down beneath its September 14 low last week. Today the Long Bond is in a brief consolidation just above its Head & Shoulders neckline. Should it decline beneath the neckline there may be an outright panic in bonds..

The scenario as I have described it so far is alarming, since it shows that liquidity is being absorbed faster than it is being injected. Ben Bernanke may be hiding another banking crisis in the making.

 

The rally in the SPX was stopped last Friday at the top trendline of its Orthodox Broadening Top. This appears to be a decisive turn without a new high in the SPX. The Cycles Model suggests yet another week-long decline as we saw in the last week of the year. This time it will be much more severe. The minimum target may be Cycle Bottom at 1299.91. However, as ZeroHedge points out, “… not only are equity futures traders the most net long in six years but NYSE Margin Debt is also near four year highs. Add to this the fact that VIX futures are the most net short they have ever been - crushed by an all too visible hand – and it appears that equity market participants were critically unafraid of the fiscal cliff uncertainty.”

 

The Euro completed a double zigzag correction and Primary Wave [2] on December 18. Trading Channel support was finally broken on January2 and a small touch-back retracement followed yesterday. Intermediate-term support is being challenged today. Once the 50-day moving average is broken we may see a long overdue free-fall decline in the Euro.

Good luck and good trading!

Tony

Anthony M. Cherniawski

The Practical Investor, LLC

P.O. Box 129, Holt, MI 48842

www.thepracticalinvestor.com

Office: (517) 699.1554

Fax: (517) 699.1558

Disclaimer: Nothing in this email should be construed as a personal recommendation to buy, hold or sell short any security. The Practical Investor, LLC (TPI) may provide a status report of certain indexes or their proxies using a proprietary model. At no time shall a reader be justified in inferring that personal investment advice is intended. Investing carries certain risks of losses and leveraged products and futures may be especially volatile. Information provided by TPI is expressed in good faith, but is not guaranteed. A perfect market service does not exist. Long-term success in the market demands recognition that error and uncertainty are a part of any effort to assess the probable outcome of any given investment. Please consult your financial advisor to explain all risks before making any investment decision. It is not possible to invest in any index.

The use of web-linked articles is meant to be informational in nature. It is not intended as an endorsement of their content and does not necessarily reflect the opinion of Anthony M. Cherniawski or The Practical Investor, LLC.

One Response to Gold on a Slippery Slope, Stocks to Follow. January 8, 2013

  • stephen waldman says:

    Hey Tony, when is this vix explosion going to take place. The Bernake controls the vix don’t you know and he also controls the dollar so therefore he controls the markets. The spy has an inverted head and shoulder pattern that plays out to around the 1525 to 1550 area. Does that make your patterns void, with the blast to the moon something has had to happen to make your patterns void. stephen

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