Stock and Commodity Trends Impact of a Weak U.S. Dollar
Stock-Markets / Financial Markets 2009 Jun 04, 2009 - 06:45 AM GMTComments as of Wednesday's close: Risk assets have been benefiting from a weakening U.S. dollar. On Wednesday, the dollar strengthened on concerns about the economy (acting as a safe haven). From a technical perspective the dollar index has some support near 79.05 and 78.98 (today’s low was 78.33 – we are at 79.53 now). Last time these areas came into play, a three week countertrend rally followed, which is one reason we have been taking relatively small positions in recent weeks. A multi-week dollar counter-trend move is a possibility - we just need to be aware of it.
Bullish GAPs Still In Play - Support On S&P 500 Holds
06/03/2009: On May 8, 2009, we presented this chart of crude oil (see below). Oil was trading at $58 when we posted the chart. The gap was filled as oil recently traded over $68. Today, similar chart patterns are present in many asset classes. We will illustrate the current situation using SLX (steel stocks).
By Chris Ciovacco
Ciovacco Capital Management
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Chris Ciovacco is the Chief Investment Officer for Ciovacco Capital Management, LLC. More on the web at www.ciovaccocapital.com
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