Reading the thoughts of bloggers this morning, you’d think the markets were lower by leaps and bounds. Futures are off (-0.23%) so a little context is in order, given my decision to reel in some profits on Wednesday.
USD futures are lower by (-2.745%) was measure from recent highs. (103.82 > 100.97). We see a trend line coming into view.
Gold is responding in kind, with a direct correlation to the dollar. Our targets remain steadfast. Horizontal line are the likely destination, if the dollar continues its trek lower. Keep in mind where the dollar is relative to the illustrated trend line. RSI is still rising.
IAU monthly shows prices below the 20 and 50sma.VBP is a pretty big hurdle overhead as well, while stochastic declines.
The US Treasury 10 year yield has further to go, to reach an inflection point. There is a small price consolidation zone, where we moved sideways in late November. Watch for an inflection here, otherwise the trend line is our target.
Crude is also responding to a weaker dollar. If you’re trading crude futures or energy related shares, look for higher prices if this continues.
Finally we have a chart with SPX USD and GOLD. Note the correlations. The S&P500 and dollar have been rallying together.
The bottom line from my perspective is, news is noise. Respect price action and check macro levels everyday. Right now we are consolidating near all time highs. Until we break out of the sideways range, like the Nasdaq suggested, we remain in a holding pattern. Trade individual stocks in smaller size and trail your stops.
I will be preoccupied most of the day, so I won’t be in the trading room to issue alerts. This is one reason for profit taking on several positions.
Use the Watch List and Sector performance as your guide. Energy was moving higher into the close yesterday.
Happy Trading – Vinny
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