Thursday, August 7, 2014

A Tale of Two Charts (Gold & The Dollar)

I'm super-busy this morning -- putting on a new trade and grabbing gains -- but here are two charts I need to share with you.

First, an updated version of the weekly chart of the Dollar Bullish Fund (UUP) that I showed you on July 28. It tracks the US dollar Index closely.

(Updated chart)

You'd think a test of #2 looks like a certainty, right. Except that nothing is certain in the markets, and there is ALWAYS another chart.

Next, here is a daily chart of the UUP, and below that, I've put gold vs the dollar. Gold USUALLY goes in the opposite direction of the US dollar, but not always. They both rallied this week because of geopolitical fears, among other reasons.

(Updated chart)

The daily chart of UUP looks like it is running into trouble -- just as it gets close to that overhead resistance. While the resistance line may still act like a magnet, it sure looks like sellers are chomping at the bit to sell the greenback.

That could be good for gold. But we'll see. Good luck today.

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