Stocks in the US are caught in trading range, as the S&P 500 flirts with the highs and as we approach the Labor day holiday.
I would expect that the stock market will remain range bound until at least Sept 6th and/or Sept 12th, when we will hear from the Federal Reserve and European Central Bank and hopefully get clarity on the course of monetary policy one way or another. I would not be surprised if the market rolls over here and at least comes into the $138 range, as the MACD is rolling over and the advance appears to have little volume conviction.
The dollar (as exampled by the Powershares US Dollar bull fund- ticker UUP) is at an important inflection point, trading around the $22.4 area.
This is the fifth time the UUP has traded into this price point. The UUP has been in trading range between the $22.4 and the $23.15 price points since mid-May, and noting the current price also represents the last higher volume trading day (May 15, 8+ million shares), marking the breakout into the current trading range. Any break below current prices would suggest a downdraft into the $21.80 price point is in the offing, corresponding with $79 on the dollar index. Any upturn may suggest a rejection of the lower prices and portends to a move into the top of the trading range.
As for the dollar's ugly stepsister (at least for the time being), the Euro has been in rally mode since Draghi's mid-July comments about the ECB directly buying sovereign bonds.
The FXE (the Currency Shares Euro Trust) is trading into the $124 resistance level. This price point is close to the high volume (3.5 million shares) low of $124.83 marked on May 23rd. This rally has been on light volume. I would not be surprised if the rally fades heading into September.
As for gold stocks, we saw a 1.4% pullback in the MarketVectors Gold Miner ETF (ticker GDX) in yesterday's trading, mimicking the afternoon sell-off in gold.
This weakness may very well continue today, as Bloomberg is showing gold trading off by more than $10 per ounce. That aside, I believe yesterday's pullback was healthy, noting that the GDX has run upward by more than 16% without any pause. I also like that the pullback occurred on only 8.3 million shares, far lighter than any other upswings into the same price point. I continue to look to increase my exposure to gold and precious metal miner shares at lower prices.
I would expect that the stock market will remain range bound until at least Sept 6th and/or Sept 12th, when we will hear from the Federal Reserve and European Central Bank and hopefully get clarity on the course of monetary policy one way or another. I would not be surprised if the market rolls over here and at least comes into the $138 range, as the MACD is rolling over and the advance appears to have little volume conviction.
The dollar (as exampled by the Powershares US Dollar bull fund- ticker UUP) is at an important inflection point, trading around the $22.4 area.
As for the dollar's ugly stepsister (at least for the time being), the Euro has been in rally mode since Draghi's mid-July comments about the ECB directly buying sovereign bonds.
As for gold stocks, we saw a 1.4% pullback in the MarketVectors Gold Miner ETF (ticker GDX) in yesterday's trading, mimicking the afternoon sell-off in gold.
This weakness may very well continue today, as Bloomberg is showing gold trading off by more than $10 per ounce. That aside, I believe yesterday's pullback was healthy, noting that the GDX has run upward by more than 16% without any pause. I also like that the pullback occurred on only 8.3 million shares, far lighter than any other upswings into the same price point. I continue to look to increase my exposure to gold and precious metal miner shares at lower prices.
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