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May 27, 2009 / Jeb

Dollar and Treasuries Look Bearish/Gold Mining Looks Bullish

gdx 5-26tlt 5-26dollar 5-26I want you to take a look at this chart of the dollar and the long term treasuries.  They are both very bearish charts.  The dollar  has a head and shoulder reversal pattern.  In December there was heavy institutional selling followed by a retest of the high on low volume.  Each time it has tried to retest its 50 day moving average it fails.  200 day in danger of turning negative meaning that inflation is on its way.  Both treasuries and dollar appear to be very bearish on the GDX which tracks mining stocks is giving a very bullish picture as we just had a breakout.  I would wait for GDX to pull back to its 20 day moving average or the 38.50 are before buying.

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