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Weldon's Money Monitor: Take the Money and Run



From the Steve Miller classic ...

This here's the story about Billy Joe and Bobby Sue ...
Two young lovers with nothing better to do,
Than sit around the house, get high, and watch the tube,
And here's what happened when they decided to cut loose ...

They headed down to El Paso,
That's where they ran into a great big hassle,
Billy Joe shot a man while robbin his castle,
Bobby Sue took the money and run ...

Go on, take the money and run ...
Go on, take the money and run.

Bobby Sue, oh-ho, she slipped away ...
Billy Joe caught up to her the very next day
They got the money hey, you know they got away ...
They headed down south and they're still running today ...

Go on, take the money and run.
Go on, take the money and run.

Investors in European stocks are asking themselves, today should I go on, take the money, and run???

Most interesting of ALL is the action in the UK FT-100 (FTSE) Index. First, we note the clear-cut, take-the-money-and-run series of gap down days, leading to today's gap down and run breakdown. Not only has the uptrend line in place since the spring mini-low been violated, but note too that the shorter-term 50-day moving average has reversed its direction, and is now trending lower.

Observing the longer-term (daily, NOT weekly as marked, with a 100-day MA, and 100-day Volatility reading) picture as noted in the chart below, we observe that the MA has been violated in a move that has generated an uptick in the Volatility index, from extremely LOW levels. This suggests that a SHARP take-the-money-and-RUN move is increasingly possible.

Increasing the risk, globally, for ALL 'paper' is the rise in US interest rates. Observe the strong 'downside' gravitational PULL on the FTSE coming from the push to new highs in the UST 2-Year Note yield, as defined in the long-term weekly study on display below, plotting the FTSE relative to the US 2-Year Note yield. Simply, NEW LOWS, and a powerful reason to RUN.

In terms of taking-the-money and running we offer the unique perspective defined within the mega-macro-monthly chart study on display below, in which we plot the 'value' of the FTSE relative to the price of Crude Oil. Indeed, on this basis, there have only been three other occasions when the FTSE was this DEPRESSED, relative to oil, and each time has been defined by intensified macro-market turbulence, and paper-wealth disinflation.

Naturally, we LOVE IT when things converge, thematically and technically out of thin air, like they do today when we run, and run, and run to reach the SAME macro-point we have been HAMMERING for weeks, if not for months, if not for years ...

Gold is appreciating relative to ALL paper currencies, including the British Pound, as noted in the mega-macro-monthly chart on display below, revealing a fresh bull market breakout following a 50% Fibonacci based retracement relative to the 12-year bull move from 1971 to 1983.

Coming FULL circle within today's take-the-money-and-run theme ... we do the Money Monitor twist, and come up with the chart on display below, plotting the price of Gold in British Pounds, relative to the FTSE Stock Index.

VOILA! the mid-term weekly plot of GBP-Gold versus the FTSE shown above offers a COMPELLING perspective, revealing a bullish upside breakout following a prolonged first leg bull move, and, a normal 50% corrective retracement.

Note specifically, that the long-term 2-year moving average has turned to the upside, directionally, ending its own corrective swing lower, and providing full technical confirmation in support of the upside violation of the corrective downtrend line.

FINALLY, we observe the same comparison below, on a longer-term, macro-monthly basis, plotting the GBP-price of Gold relative to the UK stock market and we reach the same conclusion ...

Take the money and RUN.

Indeed, this ratio is back above the mega-long-term macro-monthly MA, has violated the long-term downtrend line in place since the late eighties, and beyond and has generated a positive signal from the 12-Month Rate-of-Change indicator, the first since the ratio was last above the long-term MA.

Again, we remain bullish on bullion, particularly on a relative basis, and specifically when compared to European PAPER, which now includes BOTH, currencies AND stocks. Take it Steve ...

They got the money hey, you know they got away ...
They headed down south and they're still running today ...

Go on, take the money and run.
Go on, take the money and run.

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No positions in stocks mentioned.
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