Strong USD contains the market today. A break of the 89-day SMA will confirm the breakout of the 50-day SMA. Let’s see if my prediction of sideways action in USD similar to March-August 2008 comes into play instead of a sharp reversal as many predict (mainly because of anchoring towards USD being in a trend instead of being open to a range bound possibility).
The removal of the USD catalyst has put a lid on the market but has not reversed the market as many expected. Notwithstanding, those that held onto commodities despite the warnings of the USD reversal are getting kicked in the teeth.
GLD is approaching its 50-day SMA at $107.87. I’m not a buyer of the 50-day. I think the USD rise has some room to run and these blow off runs tend to fall very hard. I would not be surprised to see GLD return to $100 and consolidate with USD. Oil also remains under pressure. Let’s see if the USO holds the 200 day at $35.
ES remains up +4.5 but $TRIN is slightly bearish (evidencing weak internals). I’m not interested in buying stocks today. Market leaders AAPL, BLK, IBM and and BIDU also remain weak.
3-month treasury yields remain near 0. Foreign traders that have piled into short term treasuries are doing well with their synthetic USD bet.