Corrections and Correlations

Commitement of Traders fortelling a deep correction around october. it think the smart money knows that there is something coming up in the next quarter which might upset this bull rally setting the markets into deep correction. but things look positive by the end of the year.

Double Dip , Another recession ?

Morgan Stanley's Cyclical index predicts another downturn is on the cards. the intensity of downturn may be difficult to fathom, but the indicator has been prophetic in suggesting business cycles. As the indicator (The blue line oscillator) already pointing southward, Not so encouraging news from europe and japan, emerging markets fighting the inflation monster, the next couple of months will be crucial to define the long term story.

US Dollar - Will the trend sustain

Dollar bounced back from its low and was trading around its 50 DMA. A close above 50 DMA will be a very bullish setup for US dollar. With QE 2 in its last leg and no QE 3 in offing, US dollar might bounce back harder then expected souring the commodity rally. All commodities are below their 50 dma which is quiet bearish for commoditites