By John Galt
December 12, 2011 – 05:20 ET
One chart says it all.
Unfortunately for equity traders, that just happens to be a chart of gold which should have soared on Friday to a climatic year end move and run at $1800 then $1900 if the markets believed that the world’s central banksters had cured the European nightmare. With the gold futures down some $26.50 as this is being written, obviously the world is voting on the lack of a Eurozone commitment to a solution and prepairing for the worst case scenario.
The S&P 500 gave a very important technical signal last week also:
The inability to break above the 1264-1265 level on a closing basis plus the fact that the markets have basically floundered below the 200 DMA for the last month is a very negative indicator which tends to reflect another short term top and probable break towards the 50 DMA around 1220 this week. After this week however, with the adults on vacation, the Santa Claus rally will probably occur with further irrelevant moves in the days after Christmas.
Watch for gold to test the $1700 level again soon and the EUR/USD to approach 1.3150 as a key level for once that breaks with volume, all bets are off.