What A Difference A Day Make

After putting gold back on a trade watch for the next upward move, the market sold it off with a drop of more than $28. Since the gold ETF dipped below the 108 support level, I will wait for the next sign from gold to tell me it is ready to resume its upward move. For now, the long entry that I was watching is off the table. The catalysts I have mentioned could still be played out in the near future. I will continue to watch for signs on which catalyst will emerge or for signs of any new catalyst for gold to move higher.

GLD




As the recent price actions from the US dollar telling us its imminent resurgence, the momentum took a leap forward and broke some major resistance today. Most of today’s drop in the price of gold was due to the strength in the dollar.

DXY



UUP



The Euro took a hit from the dollar, the Euro-dollar ETF, FXE, went below the 144 support level. If the dollar continue to regain its strength (which seem to be most likely at this point), then the unwinding of those dollar carry trades will start to accelerate.

FXE





I have mentioned the weakness in the financial sector previously, and I am continuing to be cautious on the financials. Take a look at the time frame when WFC and BAC did their secondary offering. Don’t get fooled by the false move. Their stock prices were being held up to move those papers. If one look closely at the financials, one can detect the underneath weakness in the sector. I’m staying away on buying the financials.

WFC