By Markus Heitkoetter
Today stocks went nowhere.
Traders were hoping that Retail Sales would be the catalyst that got the markets moving. But even though Retail Sales came in worse than expected for the 5th consecutive month, the reaction was minimal…at least in the stock market.
However, Retail Sales numbers did prompt a reaction in the U.S. Dollar. Following the release the Dollar Index dropped and continued to slide throughout the day. At day’s end, the U.S. Dollar was trading at a 4 month low.
The drop in the U.S. Dollar sparked a rally in gold and silver. With a lower dollar, Gold (GC) rallied almost 2% and traded as high a $1218.50 an ounce. Silver got a boost as well, jumping more than 3% and trading as high as $17.20 an ounce.
With the huge activity in commodities, it might be hard to believe that the major indices would settle right around yesterday’s close. But that’s exactly what happened.
The S&P closed less than 1 point lower, down just .03% and ending the day at 2098.48. The DOW lost 8 points, dropping just .04% and finishing the session at 18060.49
So the sideways pattern in the market continues.
Traders are still looking for ANY reason for the indices to break out of this narrow range. But with a light economic calendar we’ll likely see lackluster trading this week unless some unexpected news comes our way.
What to do with the dollar…
Today the Dollar Index (DX) dropped 1% and ended the day at a 4 month low. According to the PowerX Method DX has been in a nice downtrend since April 20th. PowerX traders had an opportunity to take profits at an ADR Profit Target at 94.345.
Traders are now starting to talk about the Dollar Index again, but it’s a bit late to get into this move. According to PowerX rules we’ll need to wait for 3 indicators moving in the opposite direction in order to get into a higher probability opportunity.