Despite obvious signs of economic recovery, including the brisk demand for 'big ticket' machine tools as noted on the blog yesterday, seasonally and non-seasonally adjusted jobless claims improving, a constructive Silver-Gold Ratio (SGR, chart below), implying improving general market liquidity with SGR's proximity to major support that NFTRH has been following for the last couple of months; despite these positive signs Ben Bernanke and the US Fed hold resolutely to a cautious view of the US economy. As part of this resolution, they have committed to hold rates near zero until late 2014. Huh? What gives? Will this not create inflation?
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Brent Crude Oil closed today at 123.62, as shown on the Daily chart below.
Another day with no significant reversal on equities, and though upside progress in the last two weeks has been very limited on SPX, it is still crawling up the strong resistance trendline I have on the SPX 60min chart. SPX is now trading under the support trendline from the Dec 19th low and is showing increasing negative divergence on the daily RSI, but is showing little sign of actually retracing. In the event that SPX should hit my resistance trendline again, I see that in the 1372/3 area today, so we may see a test of the 2011 high shortly: