What’s Up, What’s Down: Dollar Index in a Major Downtrend

Comments for Thursday, October 29, 2009

Looking Ahead to Today by Reflecting Back at Wednesday’s Price Action

METALS:

Lower to sharply lower closes Wednesday for copper, gold, silver and platinum aga1n. Copper had a large trading range today but the close showed action that leads me to believe its near term top should hold and copper will have a retracement lower for at least the short-term. However, it still is in a very strong up-trend at this time. Gold and silver also had weak closes but the latter is in a fairly strong support area and is overdue for a corrective rally along with the gold. Platinum had another poor close with support under 13000 basis the January contract. I am holding Sell Signals for Gold and Silver.

Silver Chart

CURRENCIES:

Higher closes yesterday for the Japanese yen, British Pound and dollar index while lower for the Swiss franc, Euro Fx, Canadian and Aussie dollar. The euro and franc continue to show signs of weakness with their lowest low and closes in over 3 weeks forming potential tops at this time while both now in support areas. The yen settled sharply higher for the first time since it made highs back in early October. However, it’s still in a major topping formation and could end up with my second (and huge) sell signal with a close below 10800 basis the December contract. You can sell the yen on any sharp rallies for now. The Canadian dollar closed sharply lower but now in a good support (9000-9400) area while forming a large potential top. The pound settled higher but isn’t a bear flag anymore still neutral while making lower lows and highs since August. I just can’t get a handle on its present formation and I would rather trade a market with a more definitive chart pattern for now. The Aussie dollar had its largest one day drop as far as I can remember giving me a SELL SIGNAL. The dollar had its best high and close in almost three weeks but still is in major down-trend with good resistance around 7700.

Japanese Yen Chart

Canadian Dollar Chart

See the balance of my morning comments, including the Metals, Softs, Energies and Grains, at my website. For my complete coverage, visit my commentary page at www.markethead.com.

Rick Alexander has been a broker and analyst in the futures business for over thirty years. He is a Vice-President for Sales and Trading at the Zaner Group (www.zaner.com) a Chicago-based futures brokerage firm. If you would like a free booklet explaining the charts mentioned above, email Rick at ralexander@zaner.com.

The information in this Report and the opinions expressed are subject to change without notice. Neither the information nor any opinion expressed constitutes a solicitation by Rick Alexander or the Zaner Group of the purchase or sale of any futures or options. Futures and options trading is speculative in nature and involves risks. Spread trading is not necessarily less risky than outright positions. Futures and options trading is not suitable for all investors.