Yet another chart telling the same USD story that has been repeated ad nauseum here the past few days (Crude, EUR/USD, GBP/USD, USDX).- Charts self explanatory. Potential evening star on weekly. Need a rally to close this week above, say 1165, to turn this into something else less negative.
- [Key question is : Now that USD is up, do stocks go down (negative correlation on flight to quality) or up (better economic news). And do we buy or sell industrial commodities? Right now, my long USD trade is about 8x larger than my long S&P trade, an indication of my relative confidence between the 2 trades. The stop loss on the S&P is the weekly UpTL at 1077]
4 comments:
Hmm you bring up some very interesting points in this blog post. Actually I read a very good article from another blogger who is currently trading gold, this might be of interest for your own trade.
http://blog.thelordoftrading.com/2009/12/3-goldums-rule.html
imho, I believe the trader from the blog above was having trouble figuring out the usd story. Since for a period on Dec after the jobs report USD was up and so was the SPX.
Personally I feel lots of sentiment and news were not clear and one could have trumped the other and over the following week the trend readjusted back to usd up and spx down.
Either, way I would love to hear more of your thoughts on this.
-Alex
I feel gold may not be a USD story. if you look at its performance it has outperform every currency. Gold maybe a paper money story. Technical flows are strong as central banks are starting to buy gold again, contrast that with them selling to the lows.
The recent gold rally may not be entirely a USD story. But this leg of the sell-off was certainly triggered by a higher USD post NFP.
In any case, I try to stick purely to chart technicals in my trading here. Right now, the technicals look very poor. The daily chart is "flagging" for another $110 decline in gold from wherever this short pause around (1130) in the sell-off ends. $1027 looks eminent.
Yes short term usd looks strong. Agree lower levels to buy gold.
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