Dollar's On the Verge of a Relief Rally Look Out!

By: Chris Vermeulen | Thu, Sep 1, 2011
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Let's talk about the dollar for a moment... The US Dollar has been stuck in a very large trading range during the past 4 months. But when the dollar actually breaks out of this pattern in either direction we should see some big price movements across the board in stocks and commodities.

From July through mid-August I was bearish on the dollar. But over the past 2 weeks the price action has become more neutral/bullish in my opinion. Its clear there is still indecision with the dollar value because every surge in price either up or down is quickly followed by a surge in the opposite direction. The key here is that the support level down at the 73.50 area has held more than three times and now I think the downward momentum is about to shift. The UUP bullish dollar etf is a good option.


Dollar Index Chart

Dollar Index


Gold Chart:

Looking at the gold chart I see potential for another sharp drop to the low $1600's. While I like the look of this chart for lower prices there is still a wild card which is the Euro-Land issues... I'm not willing to bet on lower prices because we could wake up any day to some poor news which instantly sends gold higher. Rather I am waiting for things to unfold then look to buy again for another 10-20% gain on the next rally.

Gold


Crude Oil Chart:

This chart is straight forward... The trend is down and at this time all bounces are to be looked at as shorting opportunities.

Crude Oil


SP500 Index:

The equities market has broken down sharply over the past couple months and now we are seeing a rebound and small cap stocks are making big gains. With the dollar looking bullish and stocks trading up at resistance I have a feeling we may see another downward move within the next week or so to test the lows or make a new low before putting in a real bottom.

S&P500


Mid-Week Trend Trading Conclusion:

In short, I feel the market overall is leaning towards lower prices in the coming week or two. After that we will have to re-analyze because it may be a fantastic buying opportunity for stocks and commodities.

 


Consider joining me at TheGoldAndOilGuy for ETF trade ideas on the SP500, Oil, Gold, and Silver with great accuracy. Check it out at http://www.thegoldandoilguy.com/free-preview.php

 


 

Chris Vermeulen

Author: Chris Vermeulen

Chris Vermeulen
President of AlgoTrades Systems
www.TheGoldAndOilGuy.com

10126 Hwy 126 East, RR#2
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Chris Vermeulen

Chris Vermeulen, founder of AlgoTrades Systems., is an internationally recognized market technical analyst and trader. Involved in the markets since 1997.

Chris' mission is to help his clients boost their investment performance while reducing market exposure and portfolio volatility.

Chris is also the founder of TheGoldAndOilGuy.com, a financial education and investment newsletter service. Chris is responsible for market research and trade alerts for of its newsletter publication.

Through years of research, trading and helping thousands of individual investors around the world. He designed an automated algorithmic trading system for the S&P 500 index which solves his client's biggest problem related to investing in the stock market: the ability to profit in both a rising and falling market.

AlgoTrades' automated trading systems allows individuals to investing using either exchange traded funds or the ES mini futures contracts. It is supported by many leading brokerage firms including:

- Interactive Brokers
- Trade MONSTER
- MB Trading
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He is the author of the popular book "Technical Trading Mastery - 7 Steps To Win With Logic." He has also been featured on the cover of AmalgaTrader Magazine, Futures Magazine, Gold-Eagle, Safe Haven,The Street, Kitco, Financial Sense, Dick Davis Investment Digest and dozens of other financial websites. His list of personal and professional relationships approaches 25,000, people with whom he connects and shares is market insight with out of his passion for trading.

Chris is a graduate of Seneca College where he specialized in business operations management.

Chris enjoys boating, kiteboarding, mountain biking, fishing and has his ultralight pilots license. He resides in the Toronto area with his wife Kristen and two children.

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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/