Despite a weak Friday close, the stock is still near an all time high.
A few days ago, I mentioned that the Australian Dollar looked weak. It now looks even weaker, with an enormous red candle now fully formed for the month of May. I am shorting the Australian Dollar in a different FX account apart from my stock trading account, since I find it much easier to do so. However, it is possible to trade the Australian Dollar through ETFs, though it is more cumbersome:
The ETF above will rise if the Australian falls. Although the daily chart may look somewhat overextended, it is my experience in the Forex market that once a trend begins, it can run a lot further than you may think.
Another major signal that my quadruple moving average system detected took place in the US Bond market. Below is a chart showing the long-term trend of an ETF that follows Treasury Inflation Protected Securities (TIPS):
The chart above shows the ETF entering a bull market in early 2009. Since that time, the long term trend has been up, which means that only going long TIPS could have been considered, as I never want to go against the long term trend of a market.
This week, the trend, which has been in place for 4 years, has come to an end. And it is not just this particular bond ETF, other bond ETFs such as: TLT, IEF, and SHY also look weak. Two ETFs that will benefit from bond weakness are: TMV and TBT
