Been looking at getting into GBG for a while but a look at the chart shows at best maybe a basing in the 47-50c range. The driver for GBG and a hell of a lot of other over sold shares is dependent on the US market. There is only one savior and that is the US. If you believe their market is stuffed you may as well liquidate all shares and sit on the side lines because Europe, Japan and China are stuffed. They are number 2,3 & 4 biggest economies in the world. The Chinese market continues to make lower lows but now sits just above a 200 point support level from 1900-2100. A break of this level ushers in the Oct 2008 lows.
The US market on the other hand is one of the strongest in the world for 2011. Of late it has been rising on reasonably good news and rising on the wall of worry in the euro zone. The US market is now at a critical juncture. The Dow has just surpassed the October highs and is sitting on the neck line of a reverse h&S that has a measured target around 13300. The S&P is sitting against the triangle top of down trend resistance. A close above 1272 and then 1300 signals a breakout with a measured target around 1350-1400. On the down side most indicators are showing neg divergence but the daily and weekly MACD have bullish crossed above zero line for both the Dow and S&P. Neg divergence in indicators can quickly be erased on an impulse leg up after a break out. Copper which leads the market is under performing the US markets and now sits just below significant resistance level at $350. The NASDAQ and Russell 2000 have been under performing the Dow and S&P. Look for these two markets to out perform as the first sign of a new bull market.
On the plus sign I also get an ocassional email from Applied Elliot Wave who have been reasonably accurate in 2011. They only do long term forecasting and have been expecting all markets to start impulsing down in the killer wave 3. This week he sent an update on the India Nifty changing the main call from bearish to bullish which caught everyone by surprise. The reason for the change is the markets have been trending lower but in over lapping patterns meaning corrective. His long term target for the Nifty now is to double in price. He is calling the correction almost over and the continuation of India's bull market. My thoughts are that India is an emerging market economy which are normally routed in GFC's as they were in 2008 with China. For this guy to go bullish it would have to mean the number one engine room for the world, the US may be about to break out to the upside. We will know one way or another in the next week or two.
COT Timer who trades off the COT data has S&P going bearish from Monday but has copper going bullish from Jan 9.Watch S&P 1300 for bullish case and 1200 for bearish case. In between is no mans land.
Just my opinion and not intended as trading advice.
GBG Price at posting:
51.5¢ Sentiment: LT Buy Disclosure: Not Held
