QQQQ...hit support and also back down...weak index yet again...still within the channel
XLF...a leader yet very very light volume....
UUP...fell from resistance yet again...(mistake on chart...the purple line should be where the gap day in early august closed.)
USO...still in the ascending triangle...and increasing volume as it slowly moves towards resistance...We will watch oil as a proxy for commodities and energy
Analysis: Price patterns held today for the most part, with the exception of a low volume breakout from XLF...I got in on a short DIA position today thinking that the next move will be a test of support and can very likely break. The dollar seems to be weakening and if this weakness continues, commodities of all sorts will rally. I am currently short steel and looking for a great opportunity to switch my position to a long position tomorrow. As has worked for most of 2008, i believe that it is time again to short financials, pick and choose with tech, and long energy and commodities...Confirmation would be breakdowns of support and so far that has not happened. Therefore, i suggest that it is not a bad idea to hold a small position in shorting the market or have a long position going long dollar sensitive commodities. In my opinion, the best trade would be to short the dollar and long commodities...they are coming off good support and making higher lows while XLF has been having remarkable strength lately.
Game Plan: If all still looks to be falling today and the dollar continues to rally, my main job tomorrow is to get rid of my short steel position.
Stance: 70/30 bear
Long List:
gold miners, gld
metals and mining, xme
oil services, oih
refiners, xle
agriculture
Short List:
financials, xlf
exchanges, nyx
retail, xrt
ILMN
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