With Christmas bearing down on us, we’re officially in the “silly season” now. Market volume becomes too light to trade, so it’s best to sit back and count our blessings (or not) for the year. You don’t want to put too much weight into charts that can be pushed around in low volume, but here are three charts that seem to be on Santa’s “nice” list … 
The US Dollar Index looks bullish. It is being helped out by the banking crisis in Europe, and there could be other factors as well. In any case, the dollar is on track to go test the next level of resistance around 80.
This should weigh on commodities, right? Well, let’s look at our next chart, crude oil. 
It sure looks like crude oil has held the 25% retracement of its big rally. Meanwhile, on the bottom of the chart, you can see that MACD, a measure of momentum, has turned higher. I’ve mentioned previously that crude oil historically bottoms in December. It sure looks like we’re seeing that now.
Finally, let’s look at gold. 
Gold is definitely in a bearish trend, its downward path greased by a rising dollar. However, it seems to be finding support at its 50-day moving average. MACD is bearish, but you can see that it looks close to a bottom as well, as the MACD histogram (the vertical bars) start to shorten. All in all, I’d say the majority of the gold correction is in, and while we could see lower prices, I wouldn’t want to bet against it from here.
Now, you might be wondering, how could both gold and the dollar rise at the same time? Well, I think we’re entering a world in which all paper money loses value, only some lose value more than others. The U.S. dollar could outperform in the short-term compared to other paper currencies. But the hard currencies should do well. And I’m talking about gold and oil.
You might not think of oil as a currency. But I think that perception is going to change.
So these are three charts on the “nice” list. Check back tomorrow (Tuesday), and I’ll show you a chart on Santa’s “naughty” list.
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- Friday Gold and Dollar Charts (09/18/09)
- Charts of Dollar, Gold, and Agriculture (08/13/09)
- Monday Charts on Gold, Oil & The Dollar — a… (08/25/08)
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