Gold continues to knock at resistance on the flat side of the triangle we highlighted earlier this week; updated 4-hour chart is shown below. The triangle continues to build, favoring a topside breakout. Should the pattern fail, Bulls will fight hard to hold the $1740 - $1750 level.
To the short's continued dismay, stocks are higher yet again today, even after yesterday's intraday reversal (which seemed to ignite the bear's hopes). However, as we have stated in the past, traders are prone to pulling profits in advance of a significant resistance level, and one is quickly approaching in the S&P. The question is, when stocks do pull back, will the 50-day moving average (orange) hold as support? If so, the prospect of a new bull run begins to merit attention from a technical perspective.
A look at the DXY daily chart shows it is currently finding support at the bottom end of it's established channel. Stochastics indicate that there is a chance of a crash below the bottom trendline. Should the DXY find support, which is the more probable outcome, this trader is skeptical that a higher high remains in the cards, especially with the white house's glorification of "0%" inflation in July.
This may give the FED room to signal a less aggressive path moving forward - and perhaps even mention the beginnings of a successful "soft landing" in progress?
