Dollar Target Reached, Gold Finds Support

Thursday, January 28, 2010

The dollar's strong bounce from the December '09 lows is almost complete according to the basic technical pattern. The dollar traded within the confines of a descending channel for months leading me to consider the possibility of a bullish upside break in my December Outlook. I again highlighted that the bounce was almost complete in mid-December. And, now it has reached my initial projection of $79. Breaks of descending channels project upside moves equivalent to the width of the channel.

I did not play the bounce in the dollar but watched it for caution on my gold longs. I took profits nicely on the way up in gold and I have been waiting for the prime time to add back in for a larger move. I am looking at today's action for a possible double bottom at the $105 level in GLD.
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