China and India wants to sell gold

Financial Chronical reports, India and China may press for the sale of the entire gold reserves of the International Monetary Fund (IMF) to raise money for the least developed countries.
The IMF holds 103.4 million ounces (3,217 tonnes) of gold that, if sold, can fetch about $100 billion.
Both prime minister Manmohan Singh and Chinese president Hu Jintao will have to clear the proposal before the representatives of the two countries can take it up at the IMF spring meeting in June in Washington.
The G20 heads of state meeting in London earlier this month agreed to sell a part of the IMF gold to raise $6 billion for poor countries during 2009-11.

This is interesting devlopment,lets see the impact on Gold price in coming weeks.

Sir Harry the Schultz writes this in his latest mailing,"The history of reserve currencies reveals that the position of a country as a superpower (whose currency acts as a reserve currency) tends to rotate in a natural cycle of around 100 years. Will history repeat? From 1450 to 1530 it was Portuguese (80 years). From 1530 to 1640 (110 years) it was Spanish. From 1640 to 1720 (80 years) it was Dutch. From 1720 to 1815 (95 years) it was French. From 1815 to 1920 (105 years) it was British. And then the US dollar gradually dominated the scene until 2009 of a period of 89 years.

The United States dollar is the most widely-held reserve currency in the world today. Throughout the last decade, an average of two thirds of the total allocated foreign exchange reserves of countries have been in U.S. dollars. For this reason, the U.S. dollar is said to have “reserve-currency status”, making it somewhat easier for the United States to run higher trade deficits with greatly postponed economic impact.

On stock market front ,Citigroup swung to a $1.59 billion first-quarter profit from a $5 billion loss a year earlier. Loss Per Share of $0.18 , valueline was expecting loss on .90 in 1Q. I consider it to be very good performance but most of the earning coming from trading relating activity, for credit card loss in coming months picture is still gloomy. Net credit losses are $7.2b.Tier 1 capital ratio was approximately 11.8% versus 7.7% in the first quarter 2008.





Market looking tired. The Dow was up over 50 today but sold off at the close.

Have a nice weekend.

MACD gave a right signal and we are seeing pullback

I was rather busy over last two days. As I posted in my previous blog MACD gave sell signal and we are seeing pull back. I still insist we are in bear rally.

Treasury Secretary Timothy Geithner intends to expand the Federal Reserve’s new $1 trillion Term Asset-Backed Securities Loan Facility to buy frozen assets, according to people familiar with the proposal. The revamped Fed program will sit alongside the Treasury’s planned public-private investment funds, while the Federal Deposit Insurance Corp.’s role will probably involve buying distressed loans, the people said.
Over the past seven months, the Fed has pumped in roughly $800 billion of new money into the financial system, and last week the Fed said another trillion dollars or more could be created in the months ahead. Fed is doing whatever it can to fight deflation.Inflation is a lot easier to deal with than deflation.
We didnt have obivious bear market bottom yet, values have not appeared yet,though much of the damage has been done. This rally may still go higher too 200 moving day average ( 9000), but still primary trend is down. I will putting some interesting charts over the weekend, so hang on....

Banks leading this Rally

Dow jumped 246 points to 8083, financial stocks surged Thursday, leading a broad market rally after Wells Fargo & Co. surprised Wall Street with better-than-expected results.
The news helped lift shares of other major banks, with Bank of America Corp rising by 35%.

From one of my favourite writers:
"This is a tough market to navigate. ON the one hand the world economy is a mess and completely imbalanced. Half of the world is too dependant on exports (mostly Asia) and the other half (US and parts of Europe) is in a dream world believing that they can consume more than they can produce, can pile up almost unimaginably high debt levels and can live happily ever after.""On the other hand, whenever the natural market forces begin to remedy this nightmarish state, governments step in to halt the corrective process, ultimately making matters worse and pushing the day of reckoning a little further on down the road. But in the meantime, stocks can rise from the inflationary push."

The urge to take on risk is rising. The bear is doing his job, and I expect the retail public to be entering the market in a matter of weeks. The public can never resist a steadily rising market for long, and this market is inching up week after week
As the market rises, volume is dropping. Also, MACD is close to (red arrow) giving a sell signal. Let's see how the market works around these indications.



Have a good weekend.

I correctly Predicted this rally on 11 march,check blog dated 11 Mar

If there's one thing I've learned about the market, it's that the markets are always urging us to do the wrong thing. What are the markets urging us to do now? Here's the way I see it. The stock market is telling us to "dive in," and that " a big new bull market is starting, and we should rush to put our dollars in the market." Conversely the gold market is urging us to get out of gold.
My advice is do nothing and just stay on sideline 100% on cash and wait for buying opportunity which should come in next few months.
Unemployment across the US is climbing dangerously and rapidly
US is under massive debt of trillions of dollar.
US consumer is strapped for money and still loaded with debt.
Everyother company is firing employee to reduce cost.

The latest 23% surge in the Dow Jones Industrials towards the psychological 8,000-level, is its seventh significant rally of 1,000-points or more, since October 2007. During the bear market from 1929 to the bottom in 1932, the Dow Industrials fell by almost 90-percent. There were six bear-market rallies during that stretch, with returns of more than 20%, each one fueling a sense of renewed optimism.
Market is likely to move in trading range , its better to wait before jumping in the market and load stocks.