Technical Commentary – Greek Tragedy. Withdrawl From The Euro Next?

This week…

• Greece is faltering and has no government. Is pulling out of the Euro next? France is being run by socialists. Germany’s Merkel is also having election problems. JP Morgan Chase takes a huge trading loss. But was it hedging or proprietary trading? Bond prices are breaking out (yields breaking down); the US$ Index also appears to be breaking out. Will this take gold prices lower?

• US stocks fell this past week because of Greece and then the shocking loss at JP Morgan Chase.

• Bonds broke out because of Greece. And so did the US$ break out. But will they hold? Will Greece withdraw from the Euro? Will it be a messy withdrawal or a controlled withdrawal? A messy withdrawal and bonds and the US$ could spike. A controlled withdrawal and they could rise the fall just as quickly.

• Gold could be impacted by a Greek withdrawal from the Euro. But signs are growing in behind that gold (and silver) are near a bottom. If a further drop is coming for gold (and silver) it could be washout spike so don’t sell into that. It would instead probably prove to be a buying opportunity. The gold stocks made new lows but on Wednesday they put in an outside reversal day (possible key reversal day). The reversal day needs to be confirmed.

• Oil prices fell but natural gas (NG) prices rose to their best levels in weeks. But the energy stocks follow oil and energy stocks fell on the week.

• The TSX dominated by the commodities of metals, gold and oil fell on the week.

D.C.