The Dollar index retracement respected support at 97.50, confirming the advance. Follow-through above 98.00 would further strengthen the signal. Target for the advance is 100.
10-Year Treasury yields penetrated the descending trendline, signaling that a base is forming around 2.50%. Rising troughs on the Trend Index also indicate support. Higher yields strengthen demand for Dollars.
The stronger Dollar is weakening demand for Gold. Declining Trend Index peaks warn of selling pressure. Spot Gold broke support at $1280/ounce, warning of a correction with a target of primary support at $1180.
Silver likewise broke support, at $15/ounce. Expect a test of primary support at $14.
The broad DJ-UBS Commodity Index continues to trend lower, in support of precious metals. Breach of primary support at 77 would warn of another decline.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
