Honest Money Gold and Silver Report: Market Update Tuesday 10-19-10
Market Update
Tuesday 10-19-10
Dollar Rally
The dollar gapped up almost 2% today, causing the inevitable correction in stocks, commodities, and especially gold. As mentioned for weeks now, gold was overbought and due for a pull-back; just as the dollar has been oversold and due for a rally.
The daily chart (UUP) shows the dollar has been oversold for weeks, with RSI well below the 30 level. Today's rally came on expanding volume and MACD made a positive crossover.
Overlaid on the chart are a set of Fibonacci retracement levels that give some upside targets. Notice that RSI has broken above its descending trend line.
With the dollar rallying, gold finally succumbed to its overbought condition. RSI has been well above 70 for almost two months now. MACD put in a negative crossover today.
Overlaid on the chart is a set of Fibonacci retracement levels that provide various support levels. This pull-back has been expected and should offer a good buying opportunity once support is found.
With gold and the stock market moving down today, the miners (GDX) took a hit as well, falling 4.60%. Once again - RSI has been overbought for weeks and has now broken down.
MACD put in a negative crossover and the histograms turned down as well. The various Fibonacci retracement levels offer support. The 38.2% level (54.27) held today. If it is breached, the next level to watch is the 50% zone near 52.85.
Good Luck. Good Trading. Good Health. And that's a Wrap.
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Author: Douglas V. Gnazzo
Douglas V. Gnazzo
Honest Money Gold & Silver Report
Douglas V. Gnazzo is the retired CEO of New England Renovation LLC, a historical restoration contractor that specialized in the restoration of older buildings and vintage historic landmarks. Mr. Gnazzo writes for numerous websites, and his work appears both here and abroad. Just recently, he was honored by being chosen as a Foundation Scholar for the Foundation of Monetary Education (FAME).
Disclaimer: The contents of this article represent the opinions of Douglas V. Gnazzo. Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Douglas V. Gnazzo is not a registered investment advisor. Information and analysis above are derived from sources and using methods believed to be reliable, but Douglas. V. Gnazzo cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions. This article may contain information that is confidential and/or protected by law. The purpose of this article is intended to be used as an educational discussion of the issues involved. Douglas V. Gnazzo is not a lawyer or a legal scholar. Information and analysis derived from the quoted sources are believed to be reliable and are offered in good faith. Only a highly trained and certified and registered legal professional should be regarded as an authority on the issues involved; and all those seeking such an authoritative opinion should do their own due diligence and seek out the advice of a legal professional. Lastly, Douglas V. Gnazzo believes that The United States of America is the greatest country on Earth, but that it can yet become greater. This article is written to help facilitate that greater becoming. God Bless America.
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