Been about a week or so but for good reason. I’ve just been watching this market churn through what looks like a top, only to also watch the metals climb ever higher. Actually, the action in equities could be basing here, but whatever the next trend is, it’s got the potential to be powerful. There’s pressure building.
Whatever equities do, though, I’m not playing from a swing/directional side. Day trades using futures – yes. But to pick a longer term direction is pointless right now.
So what, then? Yes, the metals. We are continuing to see dollar weakness and Gold/silver strength. If oil can drift down a bit and bring the metals with it, I would love to see the gains in the metals actually base/correct here. Ideally, a retracement to the 20 DMA would be a great place to add for what is surely next to come – a currency crisis unlike anything we’ve seen before.
As I’ve said before, we are nearing the 3-year cycle low period where the dollar should collapse. QE 1, 2 (and more?) have aided in making this possible. Any more serious pressure on equities and #3 will start gaining attention. Heck, it already is being asked in the media.
For now I am locked in on Silver, which continues to outpace gold for various reasons and will look at adding additional leverage using options if we can see a test of that 20 DMA. Old Faithful type pressure is what I am looking for going into April.
Play ’em safe, mind your stops and trade the extremes – always!