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 Al’s Trade Report for the week
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 Leading indicators
 
 In recent weeks the several key stock markets of emerging economies, China, Russia, Brazil, have turned lower and looking at a longer term timeframe are now beginning to establish a down trend.
 
 This is important to consider given the consequences for demand for raw materials and to give an indicator of the expectation of reduced demand from the customers of the companies listed on these stock exchanges – these customers include western consumers and the governments of these emerging economies funding stimulus programmes which have driven money into infrastructure building projects like, power stations, roads and the like.
 
 Coupled with the other significant news for the week – the renewed strength of the US Dollar index (DX) as measured against a basket of other currencies – which is now right on overhead resistance on the charts means the odds are stacking up for a retracement of a reasonably large part of the run up in prices in commodities and commodity currencies in the coming weeks – this could be in the order of around half of the gains made in these markets – such as the Australian Dollar, Copper, Gold etc.
 
 Gold is at an interesting point also, in that the first quarter is seasonally its strongest time, at least in the past several years – but with recent price action if it closes below 1080 on a weekly basis a test of the $1,000 level would be quite likely.  
  –end–

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