Possible bounce coming in Airliners

Airline stocks have been getting smoked with the rise in oil prices and have not participated in the market rally. These same airlines are coming into good levels of support and can see a bounce coming.

LCC:

Correction or something more?

For a trader/investor the most difficult task is figuring out whether or not the market is in a correction or about to fall off a cliff.

Calling for a correction last Thursday was an easy call as markets were too extended, leading indicators not confirming the up move, and the bullish sentiment all pointed in the direction of a correction.

For now, I have to believe the recent down move is just the beginning of a normal but steep correction in a strong uptrend. That doesn't go to say that I'm buying stocks yet however. I'll keep my eyes open on this market and will post whether or not this is a correction or something more.

USO pops into resistance on news from Libya

Oil hit a high of $94.49 today as protests and riots in Libya escalated overnight. There were reports of the Libyan leader, Moammar Gadhafi, using gunplanes and warships on protesters.

Libya is the third-largest oil producer in Africa and 12th-largest oil exporter in the World. The IEA reports that about 50,000 barrels of daily oil has already been shutdown.

As mentioned before expect more social unrest. There will be more protests coming in Northern Africa, the Middle East, and beyond.

I'm expecting $100 oil in the near-future. $100 is also good resistance. If $100 doesn't hold look for a move to $110 on crude oil.

$138-139 will be resistance on GLD

With SLV continuing to soar higher, it isn't hard to imagine GLD testing its all-time highs.

Financial Armegeddon.

Yields are spiking, the dollar is falling, and inflation is finally being addressed. For quite some time now, we have seen soaring food and energy prices but government statistics (which I have no respect for) have not shown any signs of it until now.

I think we've seen a major bottom in treasuries. Now we'll have to wait and watch if Mr. Bernanke can hold yields down and keep interest rates at 0.05%. Remember the Fed Interest Rate is a result of treasury/bond yield rates, the Federal Reserve can't just come out and say, "Rates are 'X' percent." They must buy the treasuries themselves therefore increasing demand and driving rates lower.

But the market isn't that quite easy to tame. I suspect the Federal Reserve will think otherwise and believe that if they keep printing money and buying more and more treasuries they will influence yields. This will bring even more inflation into the economy. It will be a vicious cycle. Asset markets will be extremely volatile during this time, I repeat extremely.

Expect more inflation, higher yields, volatile asset markets, social unrest and perhaps war. If you are a long-term investor stay invested in Gold and Oil. Traders should trade the volatility and expect a correction between today and the next 2 weeks.

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