Home > Uncategorized > 2012/03/14: Courtesy access to ‘Brief Update’ on Major ‘Haven’ Trend Psych Change

2012/03/14: Courtesy access to ‘Brief Update’ on Major ‘Haven’ Trend Psych Change

© 2012 ROHR International, Inc. All International rights reserved.

Short & Sweet on the specific market comments in this post, because today’s TrendView Brief Update was such an extended discussion of the two major trend ‘haven’ psychology shifts it is not possible to condense it into a concise blog post. We are of course referring to the major weakness that has affected the previously ‘Teflon’ govvies.  That is not as surprising as it might appear in the wake of the US equities more convincing escape above last summer’s highs; and especially the June S&P 500 future UP acceleration once it managed to finally sustain activity above 1,367-69 current and historic resistance. This is classic macro-technical psychology.

The other significant change has been the role reversal for the US dollar, which had previous been the ‘haven’ in foreign exchange only when crises elsewhere upset investors; and commensurately suffered during “risk on” psychologies elevating values of other asset classes and currencies. Well, that is also reversed now, even though the Fed is maintaining its endless sea of liquidity easy money policy. However, previous folks were taking ‘free’ money from the Fed and shipping it out to other global centers that were more propitious, or shoving it into attractive ‘risk on’ commodity trades to avoid putting it into the poor, old, sickly US economy.

Lo and behold, along the way problems in Europe that backed up into Asia meant…

…that the relatively better economic data in the US over the past couple of months reversed that psychology. Note how the rally in US equities has been accompanied by significant strength in the US dollar. All of which may cause a ‘crowding in’ effect for investors and traders who had resisted investing in the US equities or being long the US dollar earlier this year.

There are of course some factors which might still weigh on the US and especially the global economy. A strong US dollar and long term yields backing up (especially in Europe and Asia) might come back to affect the US outlook as well. Yet, at least for now, the govvies coming from negative ‘real yields’ due to their previous haven status may have a way to go if they knock out some key technical supports that are under threat today. We shall see.

In the meantime, there are no General Market Observations or EXTENDED TREND IMPLICATIONS technical insights here today, because anything we had to say on that was in the Brief Update. We also still encourage anyone who has not done so already to click into the two key enhanced items in the Color-Coded Calendar section in the right-hand column.

We will also be adding an update to the Current Rohr Technical Projections – Key Levels & Select Comments (also available in the right-hand column) after the US Close today to address the major shifts in the Govvies and Gold.

Thanks for your interest.

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