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One of the key market relationships we’re watching is the dollar and gold. If the dollar turns up in a big way and sustains the gains into the close, then tomorrow could be a very dangerous session for equities. The daily cash dollar index (DXY) popped above its nearest-term resistance line this morning, which triggered a negative reaction in the gold market and the SPDR Gold Shares (NYSE: GLD). Let’s notice that the weakness in gold has pressed prices beneath key micro (coil) support at $1050. Additional weakness that breaks $1040 will trigger continuation to the $1020 area next. Meanwhile, for the DXY to get any traction, the price structure must hurdle and sustain above 76.30.
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
