Slope of Hope Blog Posts
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As the EUR/USD Forex pair continues its rather steep decent during the past couple of months, it is approaching a critical major support level around 1.04, as shown on the Weekly chart below.
Not only will a drop to that level form a potential triple bottom pattern, it will also hit a triple confluence of long-term price, trendline and regression channel “mean” major support.
A drop and hold below 1.04 could see a catastrophic price plunge to levels (0.8827) not seen since October 2000. We may, however, see price overshoot and drop below 1.04 briefly, before a potential bounce occurs.
So far today, both GLD (Gold ETF) & GDX (Gold Miners ETF) gapped down & continued lower but have since recouped all of their post-opening losses & then some while the equity markets gapped up, rallied from there but topped out shortly after & have since been moving lower… essentially a near inverse mirror between the price action in the PMs & equities so far today. Should the current trends (stocks moving lower while gold & GDX rally) continue into the close today, that would indicate distribution in equities (sellers stepping in to sell the rallies) in equities & accumulation (buyers stepping in to buy the dips) in precious metals.
Nothing can break this market, can it? Under the surface, though, some sectors are certainly weaker than others. NASDAQ stocks (the likes of AMZN, FB, AAPL) didn’t enjoy the Trump rally quite to the same degree as true industrial companies, but today’s rally is worth noting if you examine where prices are relative to the Thanksgiving peak. I covered AMZN early today to take profits, but I’m sticking with FB and just shorted AAPL. If things start to slip again, I think tech stocks will lead the way.
My FOREX disposition is definitely working out (bullish on Euro, bullish on Yen, bearish on the USD) , so I’ll augment it by offering up a possible pathway for gold as we near important support……..