Today’s pullback caused no technical damage so the drop today is actually a non-event.
The dollar finally bounced but it was only a retest of resistance. I’ll be watching to see if UUP can bust through the $23.80-$23.90 range. If resistance is broken, this obviously has negative implications for commodities.
I have been moving up my stops almost daily on my currency plays. Today I got stopped out of FXB and FXC. I’m still in FXA. Today was a good day to take profits on the currency ETFs. Price momentum on all of these was in the 70-80 range on RSI. Also, depending on how your portfolio is positioned, having what equates to be “short dollar” positions along with commodity positions can really get you hammered on a day like today. I still have many commodity positions so I am glad to take these currency plays off.
QQQQs held support today. Note that the volume was very low on today’s sell off.
XLE testing support at $50.
I bought KOL today. I said a couple of days ago I thought it would come back down to support based on RSI being so extended and I think today offered a good opportunity to get in. A close stop is near by at $23.4 if it doesn’t work out.
Added SOL as a junk long. I like the cup and handle bottom in March/April and the increase in volume as this moves higher. Only thing wrong with SOL was that it was overbought. Today burned off some of that momentum. KWT (solar ETF) also closed right on trendline support today.
To sum it up, today looked like a big sell off but for most indexes it was just a move back to either support or resistance. No reason to change course on the long commodities trade based on today’s action (and being long generally).
