For the past couple of months I’ve anticipated that the rally in risk assets would run out of steam and turn lower…I’ve waited for confirmation…and I think we are seeing confirmation now…in spades! We have the NEWS and we have the CHART PATTERNS…I’m trading on the expectation of lower commodity prices, lower stock prices and a higher USD over the next few months.

The news:

North American stock markets closed lower on sluggish US economic data and growing worries about the Eurozone…there are important elections this weekend in France and Greece (but also in Germany and Italy) that may ramp up Eurozone concerns…the Eurozone is the Eye of the Storm for market risk-on/risk-off psychology right now…both political and economic risk (i.e.: a breakdown of Franco-German cooperation/escalating debt crisis.)

If the US economy is sluggish with poor employment growth…then Europe is a disaster. The global economy is slowing and the klieg lights are looking for winners in The Least Ugly Beauty Contest….  

But look at the charts:

KEY WEEKLY REVERSALS are powerful trend change signals…a number of markets made highs on Tuesday, May 1, 2012 on bullish enthusiasm then turned down for the balance of the week as fear set in. (Interesting that we are on the anniversary of May 2, 2011…a date I have label a KEY TURN DATE.)

We have Definite KEY WEEKLY REVERSALS in AUD (down 3 cents on week), NZD, Euro, Crude Oil (down ~$7 on the week), TSE (lowest close YTD) Nasdaq, Teck Resources, Wheat, and others…

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