The Dollar continued to move up today and triggered a positive divergence MACD buy signal. Gold and oil both fell sharply. The move down in oil is close to negating any near term bullish potential, so it is beginning to look like the downtrends in gold and oil are accelerating.
I would like to see gold close under $900 to feel better about the intermediate term bearish prospects. Based on my reading of trading sites, most are still looking for a continued decline in the Dollar and a breakout in gold above $1,000. Dollar bulls as measured by DSI fell to 5% on Monday which is the lowest level of bullishness in 2 years.
I think we will have some strong evidence pretty soon how these 3 markets are going to play out.
The stock indexes look set to thrust higher into August 1, but I would be cautious about adding to long positions from this point forward until we see a pullback. The RSI14 and most Stochastics are maxed out except Stoch 5,5,1 and RSI5,1 which are falling (a negative divergence), which is both intermediate term bullish and near term bearish.
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"The stock indexes look set to thrust higher into August 1, but I would be cautious about adding to long positions from this point forward until we see a pullback."
The up day in the broad mkt indices masked a lot of weakness today. 1) Semi's lagged badly; 2) TRIN was high & very high intraday; 3) many tech stks that had been in the leadership either closed down or, perhaps worse, closed up BUT below their opening price.
LRCX - was eagerly looking forward to buying a consolidation because of a clearly defined wave 2 in early July; but look at how the mkt took this stk apart today !! If this is the beginning of a 4th wave, it had better be a symmetrical triangle that gets narrower.
Btw, LRCX is an important stk fundamentally to the important semiconductor indstry.
Regards,
dave
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