Want to Boost Your Trading Skills?
By Michael Comeau
1) US Dollar Kills Commodities
The US dollar extended its rally today as traders are once again pricing in US rate hikes this year.
Just after the Brexit, Fed Funds futures implied a mere 9% chance of a December rate hike. Those odds are now back up to 48%.
At the same time, traders believe the Bank of Japan and European Central Bank will add more stimulus, which would push major currencies down against the dollar.
The dollar's rise sent oil, gold, and silver lower.
The drop in oil drove some equity market profit-taking, and the S&P 500 fell -0.3% to 2168.48, though the Nasdaq and Russell 2000 did slightly better.
Biotechnology was strong ahead of Gilead's (GILD) after earnings report, even though some analysts warned Gilead could miss expectations.
And after a week of going nowhere, the VIX rose 8%, implying that traders are starting to price in some actual potential downside.
2) Will the Gold Trap Continue?
T3 Live's Jeff Cooper seems to think so. This is what he told Daily Market Report subscribers this morning:
It's a Monday and another golden hammer.
Last Wednesday, gold and miners had a breakaway gap to the downside followed by a sharp rebound on Thursday when GDXJ backtested its overhead 20 day.
Today's gap down looks like the second cheese will get the mouse for those looking for a more pronounced pullback.
See daily GDXJ here from June with 20 day.
3) The Nintendo Hype Train Gets Derailed
Nintendo shares doubled in less than 2 weeks after the release of its incredible popular Pokémon Go game.
However, Nintendo collapsed 17% today after the company admitted that the game would
not produce meaningful revenues, even though the game is so popular that some tech experts believe it is impacting the use of social media apps like Twitter (TWTR).
On July 15, I mused that Democratic Presidential candidate Hillary Clinton's awkward Pokémon Go joke was a sign that the craze was getting out of hand.
Incidentally, Nintendo shares topped out the next day, and it's all been downhill from there:
With the benefit of 20/20 hindsight, that looks like a perfect fad stock top!