UDN appears to have broken its trendline. Both a log and linear chart are provided below. Once UDN didn’t bounce this morning, I closed my position that I opened yesterday. I’m long right now anyway so I can do without the dollar exposure since it is correlated with my holdings. We’ll need to await confirmation that this is not just a fakeout protrusion, but if this is the beginning of a dollar rally than shorting stocks will be back on the table and all longs must be viewed with a very skeptical view. I’ve been saying for weeks that I wouldn’t short the market until this trend was broken. This could be the turn but it is too early to tell. I’m just letting it unfold and keeping a close eye on EURUSD like everyone else.
Log chart of UDN.
Linear chart of UDN.
If you look at UUP, you’ll notice support at $22. Even if this rally attempt fails, it seems it would be likely to bounce at $22. Longs would have to hope for sideways action. I don’t think blowing through $22 is very realistic. So the edge here goes to the shorts.
Another battle to keep an eye on is GDX. There is a battle at the 50 day SMA.
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