Karpel’s Corner: Gold Bounces While Dollar Consolidates

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

Oh, how the mighty Dollar ($UUP) has fallen, unable to fill the gap breakdown from last week. The weakness in the Dollar has given rise to Gold ($GLD) and has seen the Gold ETF bounce almost $6 off the October lows.

If the weakness in the Dollar resumes, it will be a catalyst for further upside movement in the shiny metal. But if Dollar strength continues, it could put a halt to the upside charge in Gold. Watch $84.5 as the next level of support in the ETF that tracks the Dollar.

A big catalyst for the overall market rally has been the leadership of the Consumer Discretionary ($XLY) and Industrials ($XLI) sectors. Both have broken through long-term resistance, as measured by the 200-day moving average. For the first time in over a month, they are leading the overall market charge back into bullish territory.

We want to see continued outperformance in these sectors, along with Housing ($ITB) and Retail ($XRT).

See you next time at the Corner!