From July through mid-August I was bearish on the dollar. But over the past 2 weeks the price action has become more neutral/bullish in my opinion. It's clear there is still indecision with the dollar value because every surge in price either up or down is quickly followed by a surge in the opposite direction. The key here is that the support level down at the 73.50 area has held more than three times and now I think the downward momentum is about to shift. The UUP bullish dollar ETF is a good option.
Dollar Index Chart
Gold Chart:
Looking at the gold chart I see potential for another sharp drop to the low $1600's. While I like the look of this chart for lower prices there is still a wild card which is the Euro-Land issues. . .I'm not willing to bet on lower prices because we could wake up any day to some poor news which instantly sends gold higher. Rather I am waiting for things to unfold then look to buy again for another 10-20% gain on the next rally.
Crude Oil Chart:
This chart is straight forward. . .The trend is down and at this time all bounces are to be looked at as shorting opportunities.
SP500 Index:
The equities market has broken down sharply over the past couple months and now we are seeing a rebound and small cap stocks are making big gains. With the dollar looking bullish and stocks trading up at resistance I have a feeling we may see another downward move within the next week or so to test the lows or make a new low before putting in a real bottom.
Mid-Week Trend Trading Conclusion:
In short, I feel the market overall is leaning towards lower prices in the coming week or two. After that we will have to re-analyze because it may be a fantastic buying opportunity for stocks and commodities.
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Chris Vermeulen
