Most Important Charts of the Week
Gold is finally having its day.
Welcome to the Most Important Charts of the Week. Here we’ll go over the charts you need to know to see to plan your trading for the week ahead.
Studies have shown that the price of a stock is about 60% correlated to the overall market and 80% correlated to its sector. When I find this study I’ll be sure to save it this time… But that looks about right after playing around with the asset correlation testing tool here.
Getting an overview of the indices and sectors will give you a jump start on the week when looking for trades to make.
The Most Important Chart of the Week Is…
The dollar index. Finally the DXY is pulling back… And giving some relief for commodities and industrials. We’ll have to watch to see what it does this week. The DXY is getting a little closer to a support zone.
But this pullback led to a spike in prices for commodities. Look at gold, gold miners, and industrials.
The dollar weakening is setting off investments across the market. The action in industrials was strong last week. Honeywell (HON) and UPS (UPS) had great earnings last week. And show that maybe the economy still has some juice left in it.
This makes gold miners and industrials good places to look for trades this next week.
Markets Indexes are Bumping Up Against Resistance
But one thing to look at this week is the majors coming up to resistance. And with such a strong move higher last week, we could see a reversal early in the week…. It’s actually a perfect setup for a massive “Turnaround Tuesday.”
Turnaround Tuesday a market phenomenon which involves the market reversing course on a Tuesday. So if the markets had been strong in the trading days leading up to Tuesday, the market tends to pull back.
Look for that to happen here this week.
As you can see in the above charts, the price bars are approaching levels of resistance. This week is a major test for the strength of the market. If the markets can blast through this resistance, we’re looking at another 8% higher in the coming weeks… A strong move. And one we can take advantage of. Let’s get ready to start shopping.