Here’s What Matters In This Current Environment
I will be the first to
admit that it is easy to draw conclusions from one day of price
action, however, the conclusion is usually wrong. Nonetheless, I find myself
having thoughts again tonight that today’s action may indicate something more
than just a pull-back. Unlike other pull-backs which occur for no other reason
than more sellers than buyers, yesterday’s sell-off was caused by some factors
that are simply negative for the market….potentially. A weakening dollar
(against the Yen in particular, but across all thee majors) and a weak bond
market. Just keep your antennae up, there be something brewing here.
Yes, all the so called analysts praise the
prospect of a weak dollar. Nonsense. In the long run it is a lose lose.
Comments from Treasury Secretary Snow sound pathetically funny, “We still stay
with our strong dollar policy.” The man is obviously delusional. Name one
policy that has been enacted recently which has strengthened the dollar? Don’t
waste your time, there has not been one. Sure, today may just be a
blip/pull-back, and frankly as traders, it does not really matter.
What does matter is how can we trade this current
environment. Despite my optimism coming in, the market once again moved
sideways in a pretty narrow range. If the market does not get excited about
this news, then I do not know what to tell you.
However, the one sector I did mention yesterday,
The Gold Stocks, performed well, albeit in a buy and hang on for a while
type manner. But, if that is the way we need to trade the market in order to
make things happen, then so be it. I will continue to keep an eye on stocks
like Newmont Mining (NEM),
Gold Fields (GFI) as they tend to be the gold
stocks with good range and liquidity. The fact is, a weak dollar and a host of
other variable has kept the gold sector strong all year, it appears to be
gaining a little steam right in here.
| Support/Resistance Numbers for S&P and Nasdaq Futures |
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As always, feel free to send me your comments and
questions.