The Brains Trust - 2016, page-13242

Where do you start on a morning like this trying to give a quick technical synopsis of the market – well where else but the iron ore price. But seriously it is up strongly. I know it sounds unbelievable but that huge head and shoulders bottom is looking pretty good at this time. I know no one agrees that it could have a huge rise but I am not going to fight the price. What I have said before is what interests me, is if this head and shoulders pattern is valid, what does it mean for the economy? Copper yummy as well.

I did laughingly comment late yesterday that perhaps the New York stock market would be up by morning.....but I had more of a laugh this morning when I looked at the nine ETF’s that cover the US stock market - the biggest rise was XLF (financials) and yet it was Hilary Clinton that was supposed to be close to US banks! IBB (biotechnology) – wow. Up nearly 9%. Health Care also had a huge jump. Open slather in this sector now obviously.

Unfortunately that little head and shoulders top pattern that I mentioned late yesterday on gold played out. Met the initial target. Our gold stocks might have got a bit overdone in yesterday’s mad afternoon of trading but I don’t like where our Gold Index (XGD) got to – up under a resistance line and the apex of a triangle. So the risks of gold easing back now is increased until the inflation bogie raises its head. Probably won't be long.

So does all this mean that I am going to get that last mad rise in New York where finally all the bears turn bullish or is it only going to rally and then roll over. At the moment the behaviour seems to favour the former rather than the latter although at this stage the S&P still has to overcome those old highs.

God help us on climate change.

So buckle up for whichever way it all goes.