Cycle Trading

[desertcynlite]

I want to correct something from my prior post. Typically, over the long term, the dollar and the stock market move inverse to each other. There are a ton of charts showing this online. However, for the last month, the dollar has been going up and so has the Nasdaq. They have been moving together. The Russell and the S&P have been going sideways. The indexes seem to be doing their own thing instead of all moving together. As I mentioned, I look at intermarket relationships when I'm assessing the probabilities of my stock and ETF movements. I think the market is behaving very unusual right now, but it does that from time to time.

I exited GDXD, as I mentioned in my other posts, when I saw the dollar approaching the 200 ema. GDXU tends to move with gold and GDXD tends to move with the dollar. The dollar and gold always move inverse to each other. GDXU is not just gold, it has gold miners too but, I can watch gold for cues as to where it will move. I can watch the dollar for cues as to where GDXD will move.

I made a quick 9% on my GDXD trade and decided to take it before it reversed, which it did. I expected price to reverse on Friday because GDXD daily volume on Thursday was way above average plus, price was testing a long term resistance line on its daily chart. This stacked the probabilities in favor of a pullback. I'm expecting GDXD to pullback further to the 5 ema ($4.82) on the daily chart or maybe the 9 ema. If it does that and holds, I will jump back in and exit again at the $5.22 resistance. Once price is above the $5.22 resistance line, it should trend and I'll be sure to be in it then. I'm just not sure it will trend again because gold has the long term trend in its favor right now (see paragraph 2) and it is in a pullback which is why GDXD was in play.