I will make this short and sweet hopefully and focus on the dollar. It’s been really interesting to watch the past few days and has done nothing, except for a try higher on Tuesday, to show the world it is the world’s reserve currency and a place to head to for safety. In fact, it’s done the opposite of what a “normal” move should do given the following going on –
- Libya is about to go full-monty apeshit until Ghadafi is dead. Then what?
- Egypt is apeshit
- Bahrain… ditto
- Iran…who knows what’s next there?
- Israel saw a missile attack today
- Etc…..you can find it all on the web, but you get the idea.
The Euro is acting more and more like a place to hide, but I believe there are Sovereign debt issues there still, no? So who knows where to hide, other than – you guessed it – Silver and Gold.
We’ve got some good confirmation now on this downside move in the dollar, but I am watching 2 areas that really will define the cycles – daily and intermediate.
First is the early February low of 77. We are only $.43 away from that now and any substantial move below will confirm lower prices still. There could be a struggle and/or bounce, but it’s looking unlikely as we are only about 6 days into the current cycle.
Step 2 is where we were back in November and would be a secondary target to break through, maybe after a correction below 77. Then again, we could break it tomorrow. But watch these areas for support and then breaks, which would only drive asset prices higher.
It’s why I’m not sold on the S&P’s recent decline… and why I am staying with the only currency that can be counted on for now….metals.
For disclosure, I am long the following:
Also getting great volatility in the /ES and I will post daily pivots on that next time.
Trade the extremes – always.