The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out) which I published for members and 12631 subscribers this past Sunday.
Generally speaking, when the U.S. Dollar is strong, commodities are typically weak.
Given the explosive rally in the Dollar in recent weeks, it is worth keeping an eye on several potential developments this week and beyond.
First, the broad U.S. Dollar Index multi-year chart, below, shows an upside breakout from the well-defined triangle pattern (light blue lines). Should this move continue to hold over $83, it will be interesting to see which commodities and commodity-related stocks can defy a strong Dollar and rally, for those are likely to be the ones worth trading.
Some major, global materials firms are threatening multi-year breakdowns as the Dollar has rallied. These include: BHP FCX RIO VALE.
On their respective monthly charts, note the strikingly similar technical setups for all of them. Further weakness down below those well-defined horizontal support trendlines will almost assuredly points to serious breakdowns in this space…
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