Commodities and the U.S. Dollar almost have an odd couple relationship, in that most of the time they move in opposite directions. Both the CRB index and the U.S. Dollar currently are facing support and resistance levels that has been key for each, many times over the past 20 YEARS!
This year has been a prime example of “harvesting against resistance and buying on support” in most asset classes. Should investors harvest at resistance in the CRB and Buy on support in the Dollar? Hmmmm…Trillion Dollar question?!?!?
Game Plan….At this point in time, due to the support the dollar is on, combined with only 5% Dollar bulls, Investors should benefit from KEEPING POSITIONS they have and placing TIGHT STOPS on Commodity and Equity holdings, should the Dollar rally on support.
CK Thanks for the AGQ info… time to take a home equity loan and buy some of that low risk ETF!!! 😉
wonder how many investors are bullish on silver? – 95% ???
AGQ is the long-leveraged(2x)silver ETF if anyone is interested. Probably risky unless there is a clear breakout. On the downside is ZSL (double inverse).
Silver is now nearing a 20% gains since the upside break of the ascending triangle, when we were pulled into a position. Another example of how the “Power of the Pattern” can work in our favor!
Yes it would be reaching some overbought levels, due to this big rally.
Don’t discount how powerful a breakout could be, once any product breaks highs reached a few years ago.
Concerning the silver, the 30 years fibo breakout has occured, but… if we look at the MACD and the RSI (currently 84.44!), I have doubts about purchasing SLV right now as it is clearly overbought…
What do you think? Did you buy?
interesting action on the S&P over the last 4-5 sessions. Surging to attempt to break above the left shoulder top of 1150.45 in early 2010 but each time (so far) failing and falling away (looking wickish). Thoughts on this as a consolidation before a new bull run as this would invalidate the current H&S pattern? Seems if we don’t get through tomorrow or Thursday we likely will not in the short term (at least) due to a failure at resistance in the face of a very likely weak ISM?
Like the kid in the car on a long family trip – “Are we there yet Daddy?”
From today’s WSJ – “At some point, the powers that be will figure out that rising interest rates will be the cure for what ails the U.S. economy by driving the dollar higher, commodities back toward their extraction values, and encouraging commitments of capital based on market mechanisms, not the wishes of the government and the Federal Reserve. That will not be good news for Wall Street, which doesn’t do well in a rising interest-rate environment. See the 1970s. Time to hunker down and get back to basics.”
How do you know that there are only 5% of investors that are bullish on the USD? What sentiment indicator are you using?
What would be the ETF to use for silver?
80 has given way as you mentioned…when it did commodities, soared…this is why I would keep international stocks and commodities positions for right now and just protect the nice gains with a trialing stop.
Silver looks to be creating some space above the 30-year fibonacci 38% level. Acting like is should at a breakout of resistance.
For the dollar, in the last 2-3 years, it has fallen below the current support level, but it also appears that support is rising during this same time frame. Any thoughts on the implications of this?
Interesting that the dollar is at key support, and commodities (and stocks) are at key resistance all at the same time.
I see it reported on bloomy that EU suspect countries bond yields blow out to pre-crisis levels. A hiccup in the Euro and the clownbuck soars………..