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The U.S. Dollar is making its second attempt to “Jump Resistance” at (1) in the chart above. I shared last week that the key to these markets getting really exciting is a key line in the sand for the Dollar(see post here) .
Silver ETF (SLV) of late created a good pattern to establish short positions(see post here). An update to SLV is below…
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The “Power of the Pattern” suggested to establish short positions at (2) by picking up ZSL. Despite some wild action of late, resistance at (2) remains in place.
SLV short positions have to be managed carefully due to support line (3) coming into play!
If support line (3) is taken out, ZSL will make some sweet gains. Last time SLV broke support ZSL picked up 80% in a matter of days, not weeks or months (see post here). Should support line (3) give way for SLV, the next support line is a long way down!!!
Hi Chris,
It looks like you are spot on with the dollar. It is now above the 38.2% Fib line. Today the market is up, and yet the dollar is still rising (UUP:0.54%).
I also agree with Luke above with regards to the sell-off. All indicators that I look at are at August lows (they were not as low on Oct 4th).
Market may hold at ~1158 level as this is the 61.8% Fib retracement from October highs.
In summary, We may see short-term bounce (3-4%) then back down as things are getting ugly.
Rydex Nova/Ursa ratio has not come down like in July-August so people do not seem phased by latest sell-off
I will definitely be watching the trendline on the Wilshire. Looks like below 12000 means increase shorts.
Thanks,
Aaron
The dollar’s had a good run, but it’s all but over now. All the good stuff is incredibly oversold, stocks, precious metals, you name it, plus crude oil has shrug off this dollar rally like it never even happened, plus the volatility index has barely budged despite the heavy selloff in stocks… When the S&P dips 100 points in 6 days and the VIX doesn’t even take notice, you know it’s REALLY time to ditch your worthless dollars, and go grab the real good stuff with both hands AND feet.
Chris,
The TV stations are calling ‘blood in the street’ today – does that mean the crowd is long USD and treasuries and we need to look at other side of the trade ?
I like GLD here – i think it will swing 5 points – daily !
Thx – learning a lot from ur insight.
Thank you so much, Chris. You are brilliant! Happy Thanksgiving!