Printing money isn't free or we would all be millionaires buying dollar goods. Debasing money causes a country's currency to drop over time and causes inflation. The dollar may have peaking (it has a smal head and shoulders pattern) and may be start to fall. Lets looks at the commodities that benefit from such action.
In reverse, gold and sliver may have ended their bear market and appear to be starting to resume their upswings. Gold is trying to break out of its bear market down trend line and may complete what might be a flag on the monthly charts. Commercial shorting in the last month in the gold and silver futures have been at levels that have corresponding to good rallies over the last 10 years.


As I discussed before in an earlier blogs Silver's entire bear market appears to be an ending diagonal. As a general measuring rule, ending diagonals return quickly to the start of the formation. If silver's decline is an ending diagonal then silver should return to the back of the start of the formation which would be its previous high. Silver also recently formed a triangle bottom, broke out to the upside and came back and tested the upper trend line of the triangle.

Oil just hit a new low last week so buying it would be very risky, however, there is a bit of light that oil may have formed at least a short term low. Friday oil appear to have broken up out of what appears to be an ending diagonal.

Posted
12-29-2008 8:02 AM
by
Richard Carlin