While my broad market calls have sucked wind lately, at least some of the other cylinders in my portfolio are firing thanks to my dollar sensitive assets (energy, commodities, precious metals). The charts below are the scenarios posted for UUP (US Dollar Index ETF) and the EUR/USD currency pair on Thursday followed by today’s updated charts. The net result of this bounce in the dollar has resulted in a move lower in energy stocks (XLE, ERX), precious metals & miners (GLD, GDX, etc..) and has spilled over to some extent to other commodities such as the agricultural commodities, such as the JO & SGG active trades, although both are still profitable & still look constructive (bullish) in the intermediate & possibly longer-term at this time. Just waiting patiently now for some of those big financial stocks to break down along with the healthcare & biotechs, which still looks likely to happen soon.
If I find the time today, I’ll try to study the currency charts in depth to try and gauge how much more, if any, upside is likely in the $USD in the coming days/weeks. The energy stocks (ERX/XLE short) remain one of my core holdings & still holds potential as a multi-week or multi-month swing trade. Any solid break below the descending triangle pattern on this 60-minute chart of XLE is likely to bring prices down towards the 78.20 target area.
USO (crude oil ETF) also continues to drift lower following the recent bearish rising wedge breakdown & backtest & is likely headed to at least the 19.20-19.25 area, if not lower in the coming days/weeks.