The dollar (NYSE:UUP) continues to control the equities and commodities market with its inverse relationship to them. The past couple years it seems that the dollar does what it wants and the all other investments move according to their relationship with rising or falling dollar prices (NYSE:UDN).
Most of you know that I follow the dollar very closely. And each morning I provide my analysis with what I feel will take place throughout the session or next 48 hours.
In Today’s (Wednesday’s) pre-market trading analysis I talked about the strength of the equities market in the past few sessions and that it looks as though it still has more power behind it.
Dollar Index 60 Minute Chart
Taking a look at the US Dollar I noticed this morning that it was pointing to even lower prices and that it would likely happen today. It was only a few hours later that the dollar went into a free fall blowing through my downside price target of $73.30. It was this sharp drop in the Dollar which sent stocks, silver and gold soaring higher yet again in our favor.
Equities Market – SPY 60 Minute Chart
Stepping back a couple hours before the US dollar dropped in value sending stocks higher I did see fear creep into the market as traders started selling their shares and buying put options expecting the stock market to fall. When I saw this I got exciting because higher stock prices are usually just around the corner which they were! That’s when I sent an update out subscribers noting we should see some fireworks very soon.
While I am bullish on the stocks and metals at the moment and are long in several positions I am starting to see signs that a pullback is becoming more likely each trading session. This is when money management is important. I do not want to give back to much profit, but I must make sure we lock in some gains during times when the market is overbought like this.
Mid-Week Trading Conclusion:
In short, we continue to ride the trend of higher stock and precious metal prices as the US Dollar spirals down out of control. Our S&P 500 (NYSE:SPY) positions are deep in the money and we continue to ride it for all it’s worth raising our stops as we go.
The big question is if the Sell In May, and Go Away will take shape or not… Im thinking it will as when the time is right I will be looking to short the market.
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My name is Chris Vermeulen the Founder of TheGoldAndOilGuy. I have more than a decade of extensive experience trading stocks, indices, ETFs, CFDs and Futures. My trading style has been thoroughly refined over the years, blending the best cutting-edge approaches that have only been possible with modern systems and diverse technologies. I believe I represent the ideal combination of trading styles and trade setups including a number of trading breakthroughs entirely on my own. It is this blend of the time-tested and innovatively new that allows me to take advantage of bull, bear and flat markets regardless of how each week plays out. I’ve repeatedly observed that one of the biggest keys to making a lot of money in challenging markets involves aiming for big, quick returns, while maintaining an extraordinary focus on minimizing risk. This may be what most distinguishes what I provide vs. the experiences delivered by the vast majority of other newsletters.