Charts of the Day

Playing around with the new Sharpcharts2 feature at Stockcharts.com. Took a look at the relationship between gold and the dollar and the S&P with the dollar. Certainly something has to give in the freefall decline of the dollar:gold relationship. The developing reversal head-and-shoulder pattern in the dollar should see a scramble to buy at around 84.75. When this happens it will end the precious metal rally and relieve some of the pressure in the commodity markets (and therefore the Fed's need to raise rates). It should also mark a significant bottom in the markets. The chart showing the dollar:S&P relationship was less conclusive in its relationship, or as an indicator of what might follow.



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