Citi's veteran technical analyst Tom Fitzpatrick has bad news for everyone. He spoke with King World News about the recently announced Spanish bank bailout plan.
"Our sense when we look across our charts is this is yet another over-promise, under-deliver dynamic coming out of Europe," he said. "Overall, everything we look at suggests to us that things are going to get worse in Europe before they get better."
He sees problems sweeping across the global financial markets. From the interview:
When we look across the whole spectrum of our equity charts, fixed income charts, and our FX charts, they all suggest to us that the quarter ahead should be quite a turbulent one.
This means we should see even lower levels in yields, flatter yield curves, lower equity markets, and a firmer US dollar. Our sense here is we are moving to the point where we’re no longer going to be able to see the stabilization on false promises and under-deliveries.
Much of this is preparation ahead of this weekend's highly anticipated Greek elections. But all of this volatility could prove to be a better thing than a muddle through:
If Europe is not going to take some decisive action here then it’s likely to get worse, and fear is a very motivating tool. I think if they (central planners) get more fearful, then maybe they will get more responsive in terms of the reaction, but at the moment they just don’t seem fearful enough.
As he sees it, gold could eventually hit $2,400 and the euro could head to $1.10.
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