They say a picture is worth a thousand words...

Pictured from left to right: Taxpayer, Barney Frank/Bernanke tag team.

Your 2010 outlook can be found here.

...and a lot of [brave? bold? insane?] bias.

[clarifications in italics]
In summary (3-6 month outlook): Dollar Up, Gold Down, Nasdaq Down and the S&P meanders about. I'm seeing gold between the 980-1000 eventually but there will be interim support at 1035. In the short-term I would anticipate a run to the 1135 resistance as the dollar eases back some. The Gold/Oil ratio should come in the 12.50x range (linked) but this, in and of itself, does not imply a floor in gold prices, just they should move in tandem for a brief period (down). SPX/Gold suggests the index will outperform the metal by 10% as well as outperforming the Nazdaq during the same period. The latter scenario (SPX::COMPQ) needs to be monitored because when the Nasdaq rolls over there is follow-through in the broader market. [The Short Nasdaq trade is what I'm most interested in.] Just note the Nasdaq is more sensitive to currency moves than the Dow and S&P.

In the short term it's likely we'll see a retreat across the broader markets (5-10% seems imminent now). There is resistance on the S&P at 1136/1140. The IYR:XLF correlation (linked) leads me to believe the IYR will re-establish the mean correlation (down). [But I am not messing with either of the two, because you are playing with fire. I am watching the Nasdaq for the short and already long USD. The IYR will pullback, but do not assume this is CRE crashing...Be nimble]

Lastly, a geopolitical event (such as Iran) does not mean people will flock to gold. In fact, I could see people buy Oil (in this case) and also go to the dollar as a safe haven.

[Note: The graph for the S&P shows a probable bounce off the 1060 area. It is not out of the question 1000 comes into play again, or perhaps 950. But for the time being I would suggest looking no further down than the nearest major support area]

Before and After Photo
(See: USD/SPX Short-term)

Dollar breaths in, now the Dollar should breath out. I've just added (blue arrows/rectangle) to the previous projection where I think the Dollar will pullback to in the short-term (~$76/$76.50). Gold has been taking a major shellacking (1095) and it's right near the 1080. target. It's quite stretched so I would expect a relief rally is coming soon. Therefore the S&P will try to get back over 1107.

PS. Score another one for TA.

Gold Bugs can Breathe (for now).

Closed this one out for now. It was a good run from $38

Stimulus Checkup - 100 Ridiculous Projects Funded by the American Recovery Act

The following was lifted from Mish (click below and read his)

Stimulus Checkup - 100 Ridiculous Projects Funded by the American Recovery Act

1. .Almost Empty. Mall Awarded Energy Grant ($5 million)
2. Renovations for Federal Building as Expensive as New Building ($133 million)
3. DTV Advertising Agency Generates Three Jobs ($5.9 million)
4. Research to Develop Supersonic Corporate Jets ($4.7 Million)
5. Water Pipeline to a Money-Losing Golf Course ($2.2 million)
7. Program to Control Home Appliances From a Remote Location ($787,250)
20. Repaved Georgia Road . . . Getting Repaved Again ($88,000)
23. Studying the Icelandic Arctic Environment in the Viking Age ($94,902)
33. Study on "Hookup" Behavior of Female College Coeds ($219,000)
35. Study of Wildflowers in a Ghost Town ($448,995)
38. Recovering Crab Pots Lost At Sea ($700,000)
50. Arizona Ants Work While Some Arizonans Remain Unemployed ($950,000)
51. Study On Why Young Men Do Not Like Condoms ($221,355)
56. Homeland Security Funds Assist Boat Tours of Alcatraz ($50,783)
60. Town of 838 to Renovate Old Hotel into a Welcome Center ($300,000)
79. Money for Lighthouse Repairs on Uninhabited Island (Nearly $1.5 million)

I guess after $1T in wasteful spending we better assemble the best minds to figure out how to create some jobs. Apparently $1T in miracle grow did not germinate those green shoots.

It seems today people are either on one extreme or the other when it comes to viewing equities and the dollar. We either hear the USD or the Market will crash...Neither is a likely outcome any time soon. What we can have is a large trading range for an extended period of time up until mid-term elections. Chances are anyone taking either extreme will be wrong, at least for a while. Advantage will likely be to the neutrals unless you are good at trading in choppy markets. There will be 800 Etraders a day churning their accounts into a margin call.

Warning: Copper is overheated

Pictured are the major pivot points for PCU. There will be several retraces, including the first very soon (Will look for entry at retrace). It's funny how quickly the reflationist have changed their tune over the last week. From "Gold Bitches!" to Bitch-slapped. The bull market is not over in gold, it just needs to shake out the momos.

It should retrace some before being poleaxed again.

There really isn't much to say as action continues to suggest the indexes easing back to major support levels. The DXY held 76.00 at the close of regular trading but I would not be surprised (but not required) to see it ease back to 75.75. As long as the S&P is south of 1100/1107 it will continue to come under selling pressure.

This made me very happy... Especially since I bought them on Monday :) Nice little breakout there . Should be able to post 42.50 in short order although a pause/pullback to 40 is possible.

Here we see a weekly view of the ratio between the USD and the SPX. The swing in the relative performance of the SPX went from approximately -20% to +20%. Expecting a mean reversion on the order of about 15% (relative) is not out of the question in the near term. As long as this scenario unfolds the commodities will cotinue to come under pressure. Also take note of the MACD making a turn.

In the very near-term I would expect the dollar to pullback slightly near 76.00. Today it found support at the 75.50 level before making a new high near 76.31. Immediate upside target cotinues to be at the 77.20-77.40 area.

Joke of the Day
Obama says US must continue to spend way out of recession

So far, so good with 74.27. Let's plan for a pullback near 75.10 before heading to 77.20. This will certainly lure the Gold Momos back in, at least for a short while until the yellow metal more than likely turns down towards 1,050/oz.

[Addendum] Just realized 77.20 is also the 50% retrace off the recent lows.

• Senator DeMint's Q&A is MINT (Must see)
• Honorable Mention: Senator Bunning