Click on Chart to EnlargeThe Euro has come down rather hard the past week, and has closed below the lower bollinger band as the bands are expanding following a consolidation. These signals from bollinger bands tend to be the best direction signals. So further decline in the Euro and gains in the dollar may be in store, which should help our active blog trades.
Click on Chart to EnlargeThis chart is USO the primary oil ETF. Now notice the bollinger band action here. Price consolidating and now breaking several days in a row to close below the bands. Now this won't continue forever, but as long as that lower band is pointing down, this could drop very sharply.
Since commodities are trading inversely to the dollar it may not be any further evidence by posting this chart, but realize the intermarket relationships. They are saying the same thing, and seem to be taking a break from the inflation trade.
Click on Chart to EnlargeThis chart above is GLD the main gold ETF. Price has followed through to the downside to the tune of roughly 10% in 4 days. That is bigger and more explosive a decline than any since the recent bear market in gold. I am definitely viewing this market as having made a significant top, probably even shortable at the current levels.
What's happening right now in gold reminds me of the first week or 2 after the top in oil last year. Everyone was still in bull mode and looking at the pullback as a nice dip to buy. And successful timing strategies looking at volatility, etc. seemed to be giving a buy signal. But then it didn't manage to bounce much, and just continued to slide. I think this might end up the same...with not even a real nice bounce for a while. But also realize that right now all the markets are moving in lock step or inverse. So it doesn't make a lot of sense to try to trade several major asset classes as diversification. It's all the same trade right now.
did you make your optionsalchemy blog invite only? any reason for that? it hasn't been updated in a while but i liked the analysis posts in there
ReplyDeleteI did, though I will probably change it back. I'm deciding what direction I want to go with it right now. For the last several months impplied volatility has been running higher than historical which is really a better environment for option selling which I don't do.
ReplyDeleteSo check it every so often, but I may leave it as invite only for a little while while I think some things through and decide what time I want to devote to it and whether it will benefit anyone else or not.