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Four Pillars Finance Newsletter

Issue #111 (7 March 2011)

Hello everybody.

The markets we cover are coming close to important junctures.


So far most cycles we use appear to be on track.
Let's have a closer look.

Here is the FPF prediction chart for the Nasdaq in 2011.

(Predictive chart made with FPF 1.1 software, available at http://www.fourpillars.net/finance/fpf.php)


Nasdaq

Current level: 2785

The Nasdaq has continued upwards in the first weeks of the Metal months, but suddenly turned down last week.
This is not unusual and also happened in the previous Metal months period last year (see chart).

I don't think this correction is over.


Potential targets are 2450 by the early April, or 2550 in May-June if we get a milder decline.
If the two year old uptrend channel gets broken, then I would look for 2100.

So, staying out and waiting for better buying opportunities down the road.

Here is our updated prediction chart for Nasdaq


The momentum indicator still shows major divergence.
Gold

Current level for XAU index: 216

Gold stocks made a bottom at 195, just above our target at 190.
The gold market starts looking a bit healthier, as silver is leading the market now.
But still the gold stocks go on lagging well below their recent highs, while the price of gold and silver has made new highs
in the recent days.
Of course there can be good reasons for that. If mining costs rise faster than the price of the mined product, then many
mining companies' profits may actually decline or stagnate despite a rising price for gold and silver.
That could explain why their stock prices lag.

Earth months bottom period is over, so we look for further gains.


But this market must stay above 195-200 to keep its current long term uptrend intact.
So that's where I want to put my stop loss.

We issued a tweet on Feb 8 to buy gold because Earth months are over.
We only publish this free newsletter every 4 to 6 weeks.
But you can follow us on Twitter if you want to receive some short updates and charts.
http://twitter.com/lunatictrader1

Here is the current chart for XAU:


US 20 Year Treasury Bond Fund (TLT)

Current level for TLT etf: 91

Bonds (TLT) made a bottom near 89 as we mentioned in our previous issue.


Is rebounding now and a break above 93 would confirm a further move upwards.

It could go to 100, but I would get out by May -June, even if that target isn't reached.
Longer term I think the support at 88 will eventually get broken, which could easily lead to a crash in bonds.
The central banks will try to postpone that moment as far as they can, but that's going to do more harm than good.

Here is the chart:


Euro – US dollar

Current level for Euro-US$: 1.40

The Euro is still climbing and easily reached our sell target of 1.38.
It is now up to 1.40, where some resistance should be met.
A jump to 1.43 remains possible, but our cycles call for a decline in April-May.

Here is the updated chart:

Happy trading, Danny


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http://fourpillarsfinance.wordpress.com

LunaticTrader
For more short term stock market direction based on moon cycles, visit our Lunatic Trader site and blog.
There we offer our weekly comments.

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Four Pillars Finance software - Free trial download


For more detailed daily prediction charts you are welcome to download the Four Pillars Finance 1.1
software on our site : http://www.fourpillars.net/finance/fpf.php
The program calculates the Chinese cycles and shows you in advance the best days , months or
years to buy or sell stocks, gold, bonds, currencies, commodities...
No experience in Chinese astrology is needed in order to use this program.

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Disclaimer: Investing in stocks, commodities or currencies is risky. No guarantee can be given that the above prediction will be correct.
Fourpillars.net cannot in any way be responsible for eventual losses you may incur if you trade based on the information
given in this article.
Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record,
simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may
have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated
trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No
representation is being made that any account will or is likely to achieve profits or losses similar to those shown. This
information should not be considered as a recommendation to engage in the purchase and/or sale of any futures contract
and/or options. Trade at your own risk.

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