Precious Metals Recover After Late Night Plunge

Themarket zoomed to new annual highs last week. Volume was sporadic, but mostly better on a daily basis last week than it has been for some time. Small cap stocks continued to lead the market higher, while bank stocks continued to act as a drag.

I reviewed both of those indices and many more in this weekend's video. I recommend you watch all, or a portion, before you begin trade this week. The video is posted to the website here. Additionally, the video contains over ten stocks setups that are immediately actionable. And those ten setups are in addition to the Top Ten Trades for May report, which was released last month. Each analysis takes account of important support and resistance zones, as well as target prices, and email me with any questions should they arise as those trades progress.

The indices from Asia to Europe are mostly higher today, however, commodities have fallen apart. The 1377 price remains my target to the upside, and I would be surprised if the index did not consolidate or begin a much larger decline at that spot. Conversely, if the SPX can run through it and volume increases, it's actually a very bullish sign (as silly as that sounds). But once again, 1377 is the number to watch, this week.

Earnings season continues this week, and the economic releases will not slow down from last week's barrage either. Accordingly, this week could be a turning point for the dollar. Recently, the dollar broke through my “must hold” support level; and went onto lose another 3% following the breakdown from support. Honestly, I would expect a pause from the decline soon, but until the dollar can rally 3.5% and take back its lost long term support, it is likely to fall much further.

A falling dollar will lend support to the bulls and their rally. But any increase in the dollar, which is nearly universally loathed, would devastate stocks and commodities. I think the dollar is the single most important chart to watch when gauging the longevity of the market rally. But for now, there is no end in sight to the decline of the perilous dollar.

The sell off we have in commodities today is another development that needs to be watched closely this week. Commodities are extremely volatile and this situation could easily escalate quickly.

Watch List

TheTradeMaster Daily Stock Alertswatch list is bullish again - and this time it's on small caps and China. To receive daily alerts each day before the market opens and for a full list of our trades and video of our current stock watch list CLICK.

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