"There is a real risk that is precisely what we will see played out in Spain over the next month. Rajoy assumes the bond markets will back down, and the bond markets assume that the Spanish prime minister will back down. And both sides end up in a nasty collision.
If it happens, it won’t be pretty. One of the main ratings agencies could downgrade Spanish debt to junk. Money might start to flee Spanish banks. Bond yields might start to spiral uncontrollably upward. Even if the ECB does intervene, by them it may be too late to prevent a meltdown.
Mario Draghi has laid out a plan to rescue Spain. But it still needs Mariano Rajoy to make the call. And it would be rash to assume that it will actually happen — or that it will happen soon enough to prevent the collision."
SEP 26 @ 0918: China stocks touch 3-year low in downbeat Asia
"“It appears as though the impact of recent [U.S.]central bank announcements is fading fast to be replaced by renewed global growth fears and yet more concerns about the lack of traction in delivering solutions to the fiscal crisis in Europe,” said Mitul Kotecha, strategist at Credit Agricole."
SEP 26 @ 0952: Oil drops more than 1% on Europe worries
"Oil futures dropped more than 1% on Wednesday on renewed concerns about the euro zone and as traders braced for a possible increase in inventories amid worries about diminished demand for oil.
Spain’s borrowing costs surged on Wednesday. The difficulties Spain faced on international bond markets come as a second night of protests against austerity measures rocked Madrid and the region of Catalonia announced elections that could potentially lead to independence of the region, Spain’s economic cornerstone."
SEP 26 @ 1039: Gold futures tumble on Europe’s woes
"Investors turned to other safe-haven assets such as the dollar and U.S. bonds, leaving gold to behave as a commodity rather than benefit from a fear trade.
Concerns that Greece may run out of money reignited fears of a “Grexit,” while Spain’s Catalonia region called an election and protests rocked Madrid. Spain’s bond yields shot higher."
SEP 26 @ 1052: Dollar strengthens; euro hit by Spain worries
"BNP Paribas strategists said that Spain — yet to request a bailout — is front and center for currency investors this week. “Investors are likely to stay on the sidelines in anticipation of the release of the 2013 budget, reforms and the bottom-up banking sector review due out on Thursday and Friday,” said the strategists."
$GOLD off TA high.
Typically, when it drops off TA highs it punches through the 50EMA equal to the range it was above.
This gives a short-term price target of $GOLD @ ...
$1780
- $1734
= $46
$1734
- $46
= $1688
DUST, 3X inverse of spot gold, is off it's TA bottom.
If it follows the same pattern as $GOLD then the short-term price target of DUST is...
$28.91
- $22.04
= $ 6.87
$28.91
+ $ 6.87
= $35.78 or 32.3% above current position.
