Yesterday I added some positions to play a potential rally in the U.S. dollar and short-term decline in gold. Let’s look at some of those trades …
(UUP: 23.42 -0.15 -0.64%) aims to track twice the daily movement in the U.S. dollar versus a basket of currencies. Yesterday was a good day to add it. It gapped higher today and should keep running.
Now, let’s look at the DRR, which tracks twice the INVERSE of the movement in the euro …
This one also gapped higher, naturally, because the euro has been acting like the “anti-dollar” lately. Notice how it went even higher this morning, then banged its head on its 50-day moving average and pulled back. It could take a few days to work through that 50-day MA, and I’ll keep an eye on it.
Now, let’s look at gold, as tracked by the GLD …
The GLD gapped lower yesterday. It tried to rally today, but that rally seems to be running out of steam. In the short-term, I expect it to go lower, and the 50-day moving average makes a good initial target.
Actually, gold is holding up pretty well considering the rally in the U.S. dollar. It just goes to show that nothing correlates perfectly in this market.
In one service, I also recommended getting short banks by buying the SKF. That is in slightly negative territory so far today, but I still think it’s a good bet.
Related Posts
- 3 ETF Charts — Double Gold, Agriculture and Nat Gas (10/06/09)
- Charts on Current Hedge Positions (09/08/08)
- Gold Accelerates as U.S. Dollar Wobbles (03/03/10)
- Could Gold Pullback Give You a Golden Opportunity? (10/16/09)
- The Dollar’s Long Kiss Goodnight (08/21/09)
{ 2 comments… read them below or add one }
I read with interest this morning you comments about the Canadian markets and the affect an Obama stimulus package would have on it. Your information about TFSA’a was very interesting. It sounds like a Canadian version of a Roth……..but is it considered a retirement vehicle with restrictions on withdrawals? This information also made wonder if there would be any movement by the Canadian government to rescind the sunset on income trusts in 2010? Would you have any comment on these two questions? As a subscriber to COA & COE from Mike in the Weiss group, as well as the Safe Money Report, I do appreciate the information and advice. At this time I cannot afford your services.
Sean, which service did you reco the SKF pick as I would be interested in subscribing to that one. I notice it went up about 29 points for the seek. Nice call. Best regards.