NASDAQ Achieves Our Target - Oil, Gold and the Dollar

Published on October 30, 2017 @ 9:31am

An incredible move Friday no doubt, as the NASDAQ and tech in general led the biggest single day rally of the year. More importantly, with our NASDAQ target now having finally been achieved, if the markets are going to back off, they'll likely do it now. However, based on the way the major indices behaved to close out the week, we could be on the verge of one of the biggest melt-ups we've seen in a very long time. It's likely to be nothing in between.

The bottom line is should the NASDAQ close today on even the most modest new high, any index shorts should not be considered. If, however, the NASDAQ can't CLOSE a new all-time high today, there is still the "possibility" of a reversal as soon as today. We'll see.

Oil continues to make new short-term highs, while gold continues to hover around recent lows. This comes as the dollar has now achieved a key long-term retracement level. Meaning, if the dollar is going to resume its longer-term trend lower, it should start doing it now.

Below is a weekly chart of the US dollar Index showing you what we're referring to. As you can see, the dollar is now up against a key retracement level that should serve up at least a short-term pullback. Further, it has also found its way back to its 25X5 DMA (purple line), which is often a tough nut to crack without first staging a pullback.

The bottom line is based on the breadth of a potential pullback in the dollar now, we'll know soon enough if the dollar's going to break down on a long-term basis again or not.

For now, we're still bullish on commodities on a go-forward basis, specifically oil and precious metals. However, precious metals have still yet to prove they want to go sharply higher yet.

Actions To Consider Today:

Trail gains in any individual company ideas with protective stops you're comfortable with.

Hold UCO for a short-term trade with a $57 price target on WTI Crude. Trail gains with protective stop at or above your entry.

Hold UGLD and trail gains with a protective stop at or slightly above your original entry price.

Individual Company Updates:

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