Lots going on this morning. The U.S. dollar is soaring, with the U.S. Dollar Index up a substantial 0.90% while the euro is sliding, down over 1,000 ticks or 0.95%. These are huge moves up in the dollar and down in the euro.
They are also great for your shares in ProShares Ultrashort Euro (EUO) and PowerShares DB U.S. Dollar Index Bullish Fund (UUP), both of which are up nicely, with open gains of roughly 9.7% and 4.7%, respectively.
AK Steel Holdings (AKS), meanwhile is up a roaring 36.4%.
Importantly, it now looks like gold is going to test the $1,196 to $1,200 level before bouncing. That’s the bad news.
The good news: A cycle inversion is not yet confirmed and the support at $1,196 to $1,200 is substantial. It is entirely possible gold will stop there, then turn around and resume the projected AI model forecast with a rally into December. Ditto for silver.
So for right now, remain patient in the precious metals. More clarity is needed before I issue any new recommendations there.
Similarly, the Dow is well above the 18,500 level, my line in the sand separating it from a sideways market to its bull move higher …
But is extremely overbought and not on solid ground, with barely more than one stock advancing of late versus those declining. In other words, the catapulting higher in the Dow Industrials is not a broad-based rally, a potentially bearish sign.
Stay tuned and best wishes …
Larry
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