Fast Turns

When the markets turn fast, we have to try to keep pace. Yesterday during the Fed commentary , The U.S. Dollar took a sharp turn, and Equities, Treasuries, Commodities and so on were shaking it up a bit too. Lets Start with the dollar…

The U.S. Dollar was due for a low , when you examine it using Cycles. I personally expected a break of the Oct lows and then a reversal, but yesterday we got what I like to call a “Yellen Candle”. Divergence in the MACD and an oversold Stochastics was hinting that a low was due, and now that it’s here , what does that mean? In Oct the Dollar rallied fast out of its Lows, and only paused briefly at the 50sma before moving higher.  We may see the same here , but I do expect the 50sma to be taken out and the Dollar to rally higher. We will take it one step at a time.

While the Markets were rattled and initially sold off , they recovered a bit and showed some “buy  the dip” mentality.  GOLD/SILVER and MINERS, however, were hit hard on Higher Volume and closed near the lows of the day.

Lets look at $GOLD

If the Dollar rallies, it usually puts pressure on The Precious Metals/miners.  Though they have been strong the past 3 months, they are due for a rest / consolidation at the least.  I expect a bounce today or tomorrow, but taking it step-by-step, I remain CAUTIOUS , expecting further downside.  I may be wrong, but look at that MACD Histogram. Weak. Above you see 2 possibilities going forward, but there are others too.

Past rallies like we have seen in Miners have also often “given it up” , like in Aug 2012 to Oct 2012.  Even the Rally out of THE LOWS in 2008 dropped after roughly 3 months and then went sideways for a good period of time.  THESE CONDITIONS can make it difficult to trade or invest profitably.

In the chart below…it is possibly trade-able, but “Buy & Hold” ?  Notice that price in DECEMBER  was roughly $31-$33 and for the next 4 months, price passed thru that area repeatedly. At the end of APRIL price was $31.88. We’ll take it a step at a time here too.

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A bounce in GDX /GDXJ  may look something like this ?? This is just a thought, a “test” of the break down.

It never pays to “tell the markets what they should do”, this is just what I see as possibilities based on past experience.  I MAY BE WRONG and usually make quite a few adjustments  as time goes on….So lets just let the Markets tell us what they’re doing,  Step by Step