Are We at Deflations Gate?

In December my indicators told me to move into a short position regarding the miners, especially gold, and I did so.  Then during the Christmas break, the strength of the move forced me to dehedge and go longer, which I did.  So far so good on that, made some nice money and was feeling good going into the new year.

This week I spent the better part of it very sick and scrambling to sell things and rehedge, as I think I was hoodwinked by greed, and not paying enough attention to the low volume week, and its implications.

As part of my reflection, I started to look at charts from December 09 to see how the miners, and commodities in general have done in this so called stimulated environment.  Some interesting finds.

The large cap miners have done nothing, while gold is up 11%, this can't be good news for them if they break this horizontal support.

Oil has, ready, done nothing, and looking at USO, it was forming IHS, and has turned back on the neckline.  I am watching this closely.

The dollar has gone nowhere, as well. Based on all that we are hearing about stimulus, you'd think the dollar is in the tank, nope.

The Euro, is down, and looks ready for the next leg down right now.  This cannot be good for the stock market.

What is up is food and copper, food I can understand, poor harvests, small commodity markets that can be overwhelmed with hot mney, etc.  Copper though is interesting, best I can guess, it is all about China, or is it.  I also hear that JP Morgan is controlling 80% of the metal in Comex, and has it warehoused, maybe a hedge against their silver exposure short.  If silver relents lower here, watch copper, also the China growth story is long in the tooth.  I am shorting FCX below its 20EMA.

We may be in a position for our next whiff of deflation, what say you?

some charts