MDM (Market Direction Model): Update

Published : October 9 2010 at 21:59 ET

The model remains on a buy for now. In the days ahead, should the NASDAQ Composite break below the 2368 level during the trading day, we will advise as to whether the model will switch signals or remain on a buy.

This current rally has correlated very closely to the U.S. dollar, which began to drop precipitously in late August. Gold began to anticipate by starting to rally a little bit earlier, and silver came on later in August as well as it broke out to new highs not seen since 1981 when silver reached $41.50 an ounce.

The current market environment is pushed around by two opposing forces: QE2 looms on one side, essentially the printing of money and the debasing of the dollar, which sends it plummeting while stocks and commodities react in teeter-totter fashion by going higher; on the other side is a poor and potentially deteriorating economic backdrop, as we saw in the jobs number on Friday.

ETFs such as DAG which corresponds to twice the performance of the deutsche bank liquid commodity-agriculture and other commodity based ETFs such as MOO, DBA, and DBC staged breakouts on Friday. They could be bought but keep your stops in place.


This information is provided by Virtue of Selfish Investing, LLC (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.