Dollar Collapse Continues

MARCH 5, 2008: Commodities led the way again. The Nasdaq was up 0.6% making this 2 days of gains in a row for the markets. It appears that the index is headed up to test its 21-day moving average at around 2300.

Commodities continued their bull market run with oil shooting up $5 to over $104 a barrel on supply shortages and flat Saudi production. The spike in crude also sent gold and silver up to new highs. Gold actually hit the illusive $1000 an ounce milestone on the June futures contract today. The sinking dollar hit all-time lows again.

Solar, steel, metals, gold/silver, and oil/gas stocks were strong while banks, financial, and insurance stocks were weak.

JA Solar vaulted 9%. Sunpower, First Solar, So. Peru Copper, Suntech, and Yamana Gold gained 5%. Research In Motion lost 3%.

Here are the top 10 leading groups: Fertilizers, Gold/Silver, Oil/Gas Producers, Farm Machinery, Ores, Steel, Solar Energy, Agricultural Ops, Oil/Gas Drillers, and Mining Machinery. We have to ask ourselves if this is really a stock market rally or a commodities rally? Is inflation really taking off globally evidenced by soaring food, energy, gold, and raw materials prices. I think so.

The stock market indexes have tested their down trending 50-day moving averages from an ‘overbought’ position and failed. IBD has now switched from ‘Market in a Confirmed Rally’ to ‘Rally Under Pressure.’ Gold, silver, grains, and oil are all moving higher in very definite up trends. We may be witnessing a ‘disconnect’ between commodities and stocks.

It’s best to stay on the sidelines in stock markets like this and not get sucked into ‘leaderless’ bear markets. Patience, Grasshopper! More at www.goldenticker.com

CNN: The Next Great Depression Is On It’s Way!