RIO & BHP get the tick of approval from Deutsche

The info below is very interesting. Seems that steel is still the big thing, even though there is still a lot of anxiety out there in general. It will be interesting to watch the money flow over the next couple of months as we are definately in for some form of pullback. I am not going to say it is happening just yet, even if I really would like too.

YES I AM STILL IN BEAR MODE.

(Bloomberg) -- Rio Tinto Group and BHP Billiton Ltd., the world’s second-biggest and third-biggest iron ore producers, had their earnings forecasts raised as much as 39 percent by Deutsche Bank AG on increased metal price estimates.

another week another bore

Well start of a new week and all is the same as last week. By this I mean that we should see more of the indexes moving within a range and not a whole lot of anything more.

the Oracle

Dollar Index

For those that get the paid members only newsletter, you would have noticed that I have been talking about the correlation between the US Dollar Index and the SP500 Equity Index.

We have seen the dollar index trend line being broken in the last couple of days. As you can see from the attached chart the correlation has been right on the money when it comes to marking major turning points in the Equity Indexes over the last 18 months.

Could this be the start of a major correction in the Equity Indexes or is it setting up for another move long out of the Flag pattern that exists on the Indexes. Only time will tell....

Its broken the Level

Keep an eye on the US Dollar in the coming days. The inverse relationship between the DXY dollar Index and the Equity Markets have been uncanny of late.

Here's a chart on Cable (GBPUSD). As you can see , its a very clear heads and shoulders pattern and we have just had a break below the 1.6200 level on the downside for a flag pattern.

If we see a large scale move back towards the US Dollar it could see movements to the downside in Equity markets.

Overnight indexes

DOW down, FTSE down, CAC flat and same for the DAX

Today here looks to be one of sitting on our hands and waiting for tomorrow, unless of course your someone who likes to short. Then maybe get ready because I reckon its a down day ahead here

Cable

Keep a close eye on Cable (GBPUSD) in the Forex markets. Its been consolidating now for about a week and we should be starting to see a decent move out of this level.

The 1.6330 level has some serious resistance there and a decent break should see it move pretty nicely.

Keep an eye in the Equity markets for some of the financials. I think you should start to see some of the financials move once the capital raisings in Citibank and Wells Fargo are complete and the TARP money repaid.

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