Like I said before, the high degree of correlation recently is amazing to me, to the point I just admire some of the charts , to see the market working like this is just fascinating.
You saw the near term expectations for EUR/USD which expects $USD to gain, the market and EUR/USD to drop and gold to drop on Dollar strength, but as a swing trade, not much longer.
SPY in green and GLD in red.
This is a longer term 30 min GLD chart and from my perspective, GLD looks like it is still working on a base, this is not a new theme, we've been watching this , calling pullbacks, etc. based on the primary trend base theory.
Thus, I don't see the trade of GLD short as much more than a swing trade and prefer some leverage on it.
Something seems to have changed very quickly near term for Gold from being rather positive to suddenly very negative and you'll see this in multiple assets including gold miners and through multiple timeframes.
For example GLD 15 min had a nice positive divegrence it had been working on the base we expected after we called for a pullback earlier in the year, expecting it to become a pullback long. However after the F_O_M_C, something changed quickly whether it be in their forecast, assumptions about inflation, whatever it was, it was fast. I doubt this has any effect on the primary trend base as far as the big picture, but for now it looks like an interruption.
GLD 10 min also showing a strong and fast negative divergence right after the F_O_M_C.
The faster, more detailed intraday charts like this 3 min GLD really show the depth of the change and how quickly.
As I said, I suspect the $USD bounces and EUR/USD fades.
GDX 60 min has a nice local positive divegrence thus I don't view a GDX short as much more than a swing trade, but we'll keep an eye on it and try to take whatever the market gives.
The 30 min chart of GDX (Gold miners) shows that same positive divergence in to the pullback area we had forecasted earlier in the year, then a sudden and sharp change right after the F_O_M_C.
The GDX 5 min chart has more detail and shows how violently and quickly things swung around.
And the trend of the GDX 1 min chart shows the same thing, but more detail with the change exactly at the F_O_M_C.
DUST , since it is the inverse should have the opposite signals (DUST long) as this 5 min chart does, from negative to suddenly positive.
The 3 min chart shows the same trend.
As does the 1 min chart.
That's numerous timeframes across 3 different assets all showing the same thing.
Is interest rates about to start going up?
-
Yes, I know - it does not make any sense - FED is about to cut
rates...but....real world interest rates are not always what FED wants it
to be.
5 years ago
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