Tuesday Nov 22, 2011
The US Dollar rallied taking gold silver and stocks down, never mind the Super Comittee.
Silver in gray moves opposite of the US Dollar, That is clear in the negative corrrelation at bottom. We noted the weakness in sliver a couple of weekends back. Gold has now joined hat move to the downside.
Markets have recovered in Europe and here this morning. But let's look to the leader here, Apple.
Apple is 12% of the QQQ. That shows as a positive correlation at bottom. It may be that a re test and a move under the 200 day MA is in order here. That was the case in June and October.
In the first graph the Dollar is only one point away from a double top. That might make the most sense. The Dollar tops again and stocks like Apple re test important MA before a Santa Claus rally in December.
Other major analysts are screaming downside breakout. I am not so sure with the VIX still elevated.
Let's look at the VIX, is it headed up or down?
That is probably too many lines on one chart but I was attempting to discern a trend. The MA ribbons seems to be peaking. The two black lines form a triangle. AT top TLT had double topped at 120. It strikes me that VIX is not confirming the move higher in TLT. We may have to wait till next week for more volume to clear this up. The SPX did bounce of Art Cashin's line in the sand at 1185 yesterday.
Market Vectors Jr versus the Dollar
UUP is an ETF for the US Dollar, in green. It moves opposite the price of GDXJ.Note the complete opposite move at the October low. We are coming to another similar situation. I suggest placing a succession of lower orders for GDXJ. A move back to 26 will be a one third drop. that sounds like a bargain basement sale to me.