The most important chart continues to be the dollar.
As I mentioned in my short AAPL post (I closed my position today – it was just a quick scalp), it seemed likely that the market might have a brief pause due to the dollar hitting support (and UDN hitting resistance). I also noted that the QQQQs along with AAPL were also running into resistance.
Note that the QQQQs hit resistance at $43.50 and backed off. Until the trend of the dollar declining breaks, I’ll continue to keep a long disposition and I will only short individual stocks over limited timeframes.
There will be a day (could come this week – who knows) when the trend breaks, stops will be hit and I’ll take a loss on my longs. That’s part of the game. The bet is that my gains will pay for the losses when that happens. Who knows, this trend could last for a while longer. It seems like a smarter play than betting on a reversal. Betting on the trend is almost always a higher probability bet.
UNG looks interesting here. We had the pipe bottom at $9 (previously discussed) and it looks like a double bottom was put in at $11 (solid enough for me to make a bet on).
Keep DMM on your radar. I don’t plan on trading it, but this is supposed to go up when housing is going down. There was a bottom put in during the summer and while it is too early to tell it is start to move higher. Could it be that on a national basis the “bottom” in housing is just a pause before a move lower?