OK. I know. The Euro actually includes 17 member nations, but it’s a great tune. Hell, the EU might become a Seven Nation Army by the time this is all done. And dammit I wish this would all get done.
I’ve been trading less this fall for a variety of reasons. But suffice it to say, the markets are stuck and have been making moves based on rumors that add a kind of “surprise” factor that the VIX doesn’t seem to capture.
In the end, I think all currencies will be lower, and gold will be higher. When that is yet we don’t know. But after this latest test of the recent highs in the dollar, I am willing to start nibbling in gold miners again.
It’s interesting that we have a swing low in the dollar after nearly matching the highs set back in very early 2010. I’ve also snapped on a Fibonacci extension that works from the last major swing low in August. The confluence of resistance up there is what I am “leaning” against here.
Gold, likewise, is testing a possible “extreme” level on the downside. It’s now posted a swing low which matches up with lows in September and highs in May.
So, I am taking an initial shot here on the long side using GDX as my proxy. If this turns out to be the 3-year high in the dollar, we may be heading for $20 loaves of bread soon and I want gold in the mix to help offset a loss in buying power.
Also a note of interest – Tastytrade is a very cool new service that provides a wealth of education and deals on financial products. I’m linking it here but will also add to the permanent list on the right column here ———–>
Check it out. Tom Sosnoff is one of the best around.
Have a good weekend and trade the extremes always!