To understand our current make money in the stock market thread, please read my article, Ghost Busters. You can find it over on the right side...label...Making Money Depends On It.
Our overall take is that the rise in the U.S. Dollar will soon end, inflation will rear its ugly big head and that the best places to be and indeed make money in the stock market will very soon be...Commodities...more specifically, Gold, Oil, Gas and Coal.
Thus we will closely watch prices for the U.S. Dollar and selected commodity stocks.
Today...the dollar...as represented by two ETF U.S. Dollar investment funds...one bullish (long) and one bearish (short.) If our assumption is correct, then the bullish fund chart patterns should soon start to fail, and the bearish chart patterns should soon start to look good.
POWERSHARES DB US DOLLAR INDEX BULLISH FUND...(UUP)...price $26.63
Chart patterns resulting from stock market trading in UUP indicate to us that UUP is currently in an uptrend and has been since August 5, 2008 when prices closed at $22.97.
Market prices tested this new uptrend on September 22 (2008) by closing at $23.30, just under the (at the time) support level of $23.55.
Since that test, prices reached a high of $27.19 on October 27...and since that high, have again drifted downward to where today...we see UUP in a weakening trading range of $26.15 to $27.20.
CURRENT SUPPORT...$26.15...CURRENT RESISTANCE...$27.20.
With prices currently close to $26.63...
This chart pattern stock picker says HOLD your long positions in the dollar and WAIT to undertake new positions in the dollar until $27.65...
At prices below $26.15 charts indicate weakness...We feel $25.75 signals the end of the uptrend and a point at which one should SELL UUP...(the dollar.)
POWERSHARES DB US DOLLAR INDEX BEARISH FUND...(UDN)...price $24.66
Chart patterns resulting from trading in UDN indicate to us that UDN is in a downtrend, and has been since closing at $28.75 on August 7, 2008. (two days after UUP became a "buy.")
Market prices for UDN tested resistance (at the time) of $28.15 on September 22 (2008) and have since continued down with the downtrend.
CURRENT SUPPORT...$24.50...CURRENT RESISTANCE...$25.25.
With prices at $24.66...
This chart pattern stock picker says HOLD (UDN) if you are long and SELL should prices decline to $24.15...WAIT to BUY new until prices penetrate resistance...$25.65.
With prices less than $24.50 we feel the downtrend for UDN continues...with prices above $25.25 the downtrend is seriously pressured and at $25.65, broken...
UDN becomes a "BUY" at $25.65 or more...(and the Dollar becomes a sell.) Gold will probably be a buy and so too, Oil, Gas, and Coal.
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Disclaimer...We do not hold positions in either of the above ...This site is not acting as your investment advisor and you must understand that ultimately you are solely responsible for any investment action you may take.
Thank you for visiting our site and thank you for telling your friends about us.
Next post...some selected gold stocks.
Tuesday, November 4, 2008
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