Thursday, December 10, 2009

Rally in Stocks Sell Off in Gold

Dear Readers,

I think we will still see lower lows in GLD but I believe we are about to see a surprise outbreak to the upside in stocks. This would indicate a divergence from the recent norm. The dollar strengthening and the US Equity Markets also strengthening. Could it be that the world is realizing that a stronger dollar is actually better for the US economy than a weaker dollar. I hope so but I doubt it.

The dollar recently broke above the 50 day moving average. We are also approaching the 100 day moving of 76.5. A breakout above would mean more pain for the GLD. My technical analysis supports this idea. I remain short GLD and today bought stocks.

Gld is approaching and soon will break it's 50 day moving average. For traders, this is an ideal trading environment. I would continue to be short GLD until we break the 50 day Moving Average then look for a pop back to the 10 day moving average and then re short.

I will keep you posted.

Thanks and Good trading,

Tim Winters