Thursday, April 21, 2011

Back to Normal

It has been a few weeks since we've enjoyed the non stop gapping up in premarket 2-3 days out of every week, but we're back to normal this week.  Gap up and then sideways or downward action during the actual session has been the predominant trade the past 6-7 months.  After yesterday's tremendous gap up, we are set for another one this morning.  This one should take us right near the 1340 level that served as trouble in early April.  With the market's propensity to do very little during the actual day after the gap up, it will be interesting to see if we'll be able to burst through that resistance area as we close off the week ahead of the holiday.

The dollar continues its relentless pounding as devaluing ourselves to 'prosperity' is the only game plan in town. What is most remarkable about the dollar index is, is that its main counterweight (weighting) is the euro - which is a region full of troubles itself. But for now everyone knows that as the dollar falls, everything priced in dollars must go up...

Per Peter Boockvar:
  • To highlight the influence of the US$ weakness to the move in stocks, in gold terms the S&P 500 is flat on the year, in euro terms its down 3.2% and in C$ and A$ it is up just .5%. Our game is played though in nominal terms and that’s the focus and saving grace.

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