Windmills of the mind

Charts are often referred to as " Windmills Of The Mind " by the skeptics but the charts don't lie, they just are hard to read. The first chart I will post is our old friend the dollar. This chart is called UDN which stands for placing a bet the dollar will go down. UDN goes up when the dollar goes down. As you can see UDN has just issued a buy signal by crossing the moving average line to the upside indicating weakness in the dollar.

Weakness in the dollar indicates strength in the Dow, Oil and Gold. Below are three charts the first being DDM which is a proxy for the Dow, the next being DIG which is a proxy for oil and gas and the third is GDX which is the gold miners proxy. As you can see they are all showing strength and GDX has issued a buy signal.

As you can see the Dow and Oil have doing nicely and GDX is starting to show some real promise. I have a position in GDX which I will report the progress on from time to time assuming I don't get stopped out again. My personal opinion is that soon the Fed will be forced to announce QEIII which should be good for stocks. Should but each Fed intervention has been weaker than the one before it so maybe the Fed will throw a party and no one will show up. Another interesting develpment has been the weakness in government bonds. I will post a chart of TBT which is a bet the price of bonds will go down and the yield will go up. Chart below. TBT has definitely issued a buy signal so I think I'll test the waters monday with a purchase.