Raising only a sign of warning at the moment...

I have mentioned roughly two weeks ago that you should not underestimate weak dollar as it stalled at its 50d moving average:

and then I left for a week on vacation... what happened since then? While I was expecting a sharp drop in dollar index and consequently a rise in equities and commodities, the latter ones in fact put a significant rally, while dollar fell just a fraction of what we got used to recently. Well, you cannot blame for mixing cause and effect relationship. equities and commodities did rally... and at least currencies did not screw my image ))))

anyway, what is next?

well, medium term volatility expressed by Bollinger Bands is falling for most of the markets and feels like September is going to be quiet. Nevertheless there ranges which can be played with. Also, we approach significant resistances foe S&P , copper and oil so for the moment I would just raise a warning sign to the recent rally.50d moving average for dollar index looks to be a good resistance and I would raise a red flag if we move above it.

S&P is approaching 200d moving average and upper BB and while it feels like there is no reason for the market to change short term trend I would get really nervous being long if we stall at this level. No reason to go short yet though, even if I continue to believe we will see much lower levels over the long term:

Chinese government, with it latest move to investigate market manipulation in rubber market is screwing my head and shoulders patter for Shanghai Composite. Also looks to be a boring market for the moment:

Oil has a potential to rally further as rose above most of the moving average and following a reversal day on August 25 the trend upwards might continue further. Again it goes against my bearish view, but I just cannot argue with the market. risk/rewards is still good for a long trade with a stop loss somewhere below moving average congestion yet I would not add to longs in here following my end of august bull case. I think it is time to get a little bit nervous about this market as well:

Copper is showing sings of trend exhaustion. Base metals were the strongest performers among risk assets. Will it lead the way down. This market is dominated by CTA's, so thinking their way, I would start liquidating my long positions, especially if Shanghai fails to to confirm Head and Shoulders pattern:

So at the moment I would only get cautious at the recent rally, but short term down trend  has yet to be confirmed. A series of lower highs in most of the market still suggest longer term down trend....

When do old news move the market?

This is my first post after a short vacation... first of all some feedback on places I visited:

1. Why Grasse is called the world's capital of perfumes if lavender fields are not there? in fact I did not find any fields and we drive more then 300km around Grasse. Wiki says that since 18th century perfume ingredients were cultivated in Grasse, so where are they?
2. The coolness of Cannes is over exaggerated
3. Overall at Cote d'Azur, local food is called pizza.

4. Yet, you can find lots of small, nice and quiet harbours west of Cannes (towards Saint Raphael). The most common food there is still pizza.

Going back to the markets... I cannot get rid of the feeling that this is not yet the end of the world as I expected it. Yes, we still have the same old skeletons in the closet, but there is nothing new. I said before that people are used to huge swings in the market and I doubt that recent news on European banks are the reason for market collapse. Having said that I obviously have to discuss the risks to this statement... There is a possibility that market decides to test banks balance sheets. So one need to watch developments in the sovereign debt markets... There had been no economic news otherwise so far this week, so at the moment we're digesting these bank problems...

No charts today as I am still sorting out staff while I was away.