Today's post is an update of the ideas and charts presented in a recent post titled "Update: European Equities And U.S. Treasuries Breaking Points".
Below is an updated chart. What does it reveal? We see uptrends being established, and as history shows these trends tend to last awhile. If you correlate to a chart of the general equities market, you'll quickly notice that each time an uptrend in these charts has established itself a significant drop in equities happens.
With that concern prevalent, we'll update our over/under lines for 2013:
DJIA 14550, way up from 13000.
GS above $137 bullish, below bearish, below $125 extremely bearish. Up from $112 and $100.
AAPL remains at $500.
It's worth noting that the AAPL over/under line was already broken by mid-January, after which it went on to lose a further and massive 23% over the next three months despite the overall equities market going higher virtually daily.
When key trends or levels of support and resistance are broken, such as when mining shares (see "A Bear Market In Gold Miners" dated February 18, read at least the last paragraph with the oft-repeated "no one could have seen it coming" lie in mind) and silver (see "Silver Update..." dated March 07) violated respective long-term uptrends and then 52-week lows (more on this concept at the end of "Clutching At Straws, Still Drowning") ... well you surely know what happened.
Key takeaway here: What happened in gold and silver recently can, and certainly will happen in equities eventually. Again. History repeats.
The only variation may be who gets stuck holding the bag, but that too very seldom varies. That's worth keeping in mind if you're among the vast majority of bag holders who insist on continuing to participate in equities and commodities markets. Shame, anger, blame and conspiracy theories won't save you, however getting a clue and acting accordingly might.