The $USD has surged back to its last resistance area of 94.95 with positive action over the last couple of days. It could be starting to accelerate after putting in a small double bottom at 94.1. Its possible an inverted H&S is in place and projects to 96.
This appears to have driven the downward movement in USO, SLV & GLD. We have broken the 50 DMA in GLD this morning and SLV is on a nice run below the 50 DMA and is at the 72 DMA which is important to GLD/SLV. CCI is below -100 and could generate a continuation of the down trend in SLV. GLD would just be starting that today after reaching -100. My target on GLD (assuming it doesn't play catch up with SLV) is 124 over the next two days. This is just under the 72 DMA for GLD currently at 124.7. Its possible GLD in a catch up move fills the gap to 120-121 in a sudden move. SLV looks like it could reach 17 where horizontal support exists, if it breaks the 72 DMA.
The additional encouraging results are in USO. After a rumor driven rally above the down channel trend line yesterday, it has collapsed under the weight of the dollar and IF it finishes at these lows today, it's setup in a configuration to go much lower IF it can generate a gap lower tomorrow. This makes me think that the next couple of days are a dangerous setup for the SPY market. If the only news making event, FMOC comments, go against the market, we could see a very sudden drop, while the dollar overcomes overhead resistance and challenges 95.75- 96. I just noticed that USO broke yesterday's lows already, which I thought probably held throughout today.
A seasonal SPY buy exists at today's close, however I am inclined to wait out tomorrow's open before thinking about entry,since the setup in the metals and oil are negative and could lead to a sudden down draft that will still end up positive, but from much lower levels. Schaeffer has commented that the market is setup for a VIX pop like BREXIT through Friday, which would cause the most disruption to both bulls and bears.
Edited by thoughtpwr, 24 August 2016 - 10:53 AM.