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The U.S. Dollar ETF (UUP) could put a big crimp in commodity prices should an upside breakout of resistance take place at (4) in the chart above. Some commodities find themselves at vulnerable price patterns right now, (head & shoulders potential in the CRB index and the oil complex). (see oil/gas post) (see CRB post) (metals challenges post)
UUP at this time “HAS NOT BROKEN RESISTANCE!” After the strong rallies in commodities rallies in 2010, should the Dollar breakout, some very quick and sizeable declines in the commodities complex should take place.
cK….as usual, an upside breakout in the Dollar can “crash the party” of many assets! Harvesting a high price is sweet, yet that doesn’t mean we have to score on defense. I have overweighted on the post of late, per resistance in the commodities arena after a great 2010. Time will tell if any of the potential H&S patterns I think I see will come true or not. I haven’t suggested to long gold or silver for a while, the patterns haven’t been very clean or bullish since the reversals on 11/8-11/10
Is UUP currently in a descending channel (is there a line parallel to (3) but lower?
If UUP breaks resistance, will this also affect silver. Seems like silver has clearly fallen through the steep rising support line, but now what? If the support line becomes resistance, the ascent could continue – although continued ascent seems unsustainable. Based on the last couple of day, i feel like I should own zsl, but is it better to wait for clarity (I have been stopped out a number of times!)?
What price would constitute a breaout? Thx.