On last Friday, we witnessed that when the USD rallied, the SPY tanked, but when the USD fell, the SPY just held flat and did not rally. Hmm maybe people are starting to realize that a USD in free fall may not be all that positive for the economy. But anyways in the short term, the USD does appear to be heading higher.
In each of the three chart above, there is a red horizontal line which represents either a major support or resistance point, and is also where the 50 DMA is situated as of Friday. The markets will most likely head lower until at least that point with the USD rallying, as the market is very jittery right now. I have my doubts that we would see another huge shakeout as what has happened earlier in the month, with the markets rallying to new highs, but we must always be open to that idea. Anyways if it is true that we are in the middle of a correction, the red horizontal line might be an area where one might want to load up on gold (95-96 on GLD) and anything precious metals related if there are signs of stabilization around that area. I see GLD holding up well whatever happens to the economy, eg as inflation hedge, or as a "safe-haven" asset.
You might also be able to say that you want to load up on stocks when the SPY stabilizes around 101.6, with that being a healthy correction from current levels. But I'm a skeptic about our current economy, and who knows if a healthy correction will turn into a full blown vicious bear market. With people losing their jobs, company beating earnings by cutting expenses, I have my doubts, and the stock market is basically saying right now that there won't be any problems in the economy. If this expectation does not turn into reality, you will witness stocks being re-priced appropriately.
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