All Posts (10732)
Sort by
The markets are taking a beating today. The SPDR S&P 500 ETF (NYSEARCA:SPY) is trading at $130.44, -1.76 (-1.33%). While things look ugly, there is a major silver lining showing up. This is a positive divergence between the markets and the U.S. Dollar.
The Dollar and the markets have an inverse relationship. Whenever the Dollar rises, the markets sell. This can be clearly seen on any Dollar, S&P 500 chart spanning the past few years. While this relationship still remains somewhat in tact, there is a divergence showing up today.
The Dollar and the markets have an inverse relationship. Whenever the Dollar rises, the markets sell. This can be clearly seen on any Dollar, S&P 500 chart spanning the past few years. While this relationship still remains somewhat in tact, there is a divergence showing up today.
The divergence is as follows. As the Dollar ETF, PowerShares DB US Dollar Index Bullish (NYSEARCA:UUP) has made new multi month highs, the SPY has not made new lows. This tells us the markets are beginning to find a short term bottom for the next week or two with upside very likely. In addition, when the Dollar finally peaks at resistance and pulls back, the markets should see a solid rally.
Take the seven day free trial to the Research Center and Intra Day Stock Chat. Their members have made tons of money in the last two weeks while the average investor has been crushed. Join the elite pros as they give swing trade alerts and proprietary market guidance.
Related: SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) andPowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ).
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Earlier today, the major stock indexes were trading sharply lower. The highly followed SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) was trading down to the $122.82 level. This afternoon, the DIA is rallying off of the lows to $124.12 a share. This is still a very good intra-day bounce especially if you happen to be a scalp trader.
How can anyone tell if the markets are going inflate and trade higher? There is usually just one answer to that question and that is gold. When gold catches a bid higher despite the U.S. Dollar Index being strong on the trading session it will usually indicate that the stock markets are going to inflate and trade higher. Today, the SPDR Gold Trust (ETF) (NYSEARCA:GLD) traded as low as $148.84 a share around the lunchtime hour. Since that low print the GLD has rallied higher and is now trading around the $151.70 level. The Market Vectors Gold Miners ETF (NYSEARCA:GDX) is actually trading higher by 3.48 percent. This is a huge move for the gold mining stocks despite the U.S. Dollar Index rallying higher on the session.
Some other gold equities that are rallying higher today include the Deutsche Bank AG DB Gold Double Long ETN (NYSEARCA:DGP), Sprott Physical Silver Trust ETV (NYSEARCA:PSLV), and Yamana Gold Inc. (USA) (NYSE:AUY). All traders should also follow the U.S. Dollar Index closely as a pullback in the dollar will also help gold equities to rally higher. Gold is still the ultimate inflation indicator.
There have been no new developments with regards to Greece and perhaps this is the very reason why investors continued to sell euros.
http://www.fx360.com/commentary/Index.aspx
A downgrade to Japan and the upcoming BoJ decision left the US dollar as the lone safe haven on Tuesday.
http://ashraflaidi.com/t/?h3306
