The Weak Dollar Gives...The Strong Dollar Takes Away
Comments as of Wednesday's close: Risk assets have been benefiting from a weakening U.S. dollar. On Wednesday, the dollar strengthened on concerns about the economy (acting as a safe haven). From a technical perspective the dollar index has some support near 79.05 and 78.98 (today's low was 78.33 - we are at 79.53 now). Last time these areas came into play, a three week countertrend rally followed, which is one reason we have been taking relatively small positions in recent weeks. A multi-week dollar counter-trend move is a possibility - we just need to be aware of it.
Bullish GAPs Still In Play - Support On S&P 500 Holds
06/03/2009: On May 8, 2009, we presented this chart of crude oil (see below). Oil was trading at $58 when we posted the chart. The gap was filled as oil recently traded over $68. Today, similar chart patterns are present in many asset classes. We will illustrate the current situation using SLX (steel stocks).
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Author: Chris Ciovacco
Chris Ciovacco
Ciovacco Capital
Management
Chris Ciovacco is the Chief Investment Officer for Ciovacco Capital Management, LLC. More on the web at www.ciovaccocapital.com.
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Ciovacco Capital Management, LLC is an independent money management firm based in Atlanta, Georgia. CCM helps individual investors and businesses, large & small; achieve improved investment results via research and globally diversified investment portfolios. Since we are a fee-based firm, our only objective is to help you protect and grow your assets. Our long-term, theme-oriented, buy-and-hold approach allows for portfolio rebalancing from time to time to adjust to new opportunities or changing market conditions.
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