The Night Before: US Equities Down 1%, Oil Down 2%, Gold Up 1% (Coronavirus Fear Again)

It is the night before Monday opening.

And it is ugly.

The Dow Jones mini is down 346 points as of 7:30pm EST on Sunday evening.

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Bond market futures are up, meaning yields are down.

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Oil futures are down 2.55%.  And GOLD is up 1%!

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Yes, it is the coronavirus impact global supply chains.

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Or it was Tyson Fury licking Deontay Wilder’s neck in their rematch fight on Saturday night.

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Dollar Bop! US Dollar Index Approaches 100 (Golden Cross) As Coronavirus Fears Mount (Gold Rising Too!)

The US is experiencing the Dollar Bop!

The Dollar Index looks poised for a run at the 100 level for the first time since 2017 as investors seek out the safety of American assets amid the ongoing coronavirus spread.

The U.S. currency has benefited this week from a narrowing in haven options, with the yen slumping to a nine-month low on fears the outbreak could push an already struggling Japanese economy into recession. In contrast, U.S. stocks closed at a fresh record Wednesday, Treasuries are seeing continued demand and a bullish golden cross pattern is set to form in the dollar gauge, suggesting further upside is possible.

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The golden cross is a candlestick pattern that is a bullish signal in which a relatively short-term moving average crosses above a long-term moving average. The golden cross is a bullish breakout pattern formed from a crossover involving a security’s short-term moving average (such as the 15-day moving average) breaking above its long-term moving average (such as the 50-day moving average) or resistance level.

The US dollar index follows President Trump’s approval rating. Or is it that Trump’s approval rating mirrors the US economy?

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Gold is also flashing a technical buy!

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Gold surpassed $1,600 an ounce this week and its climb may not be over yet. The GTI Vera Convergence Divergence Indicator, a technical measure which detects trend exhaustion, triggered a buy signal on Tuesday, its first since the end of January. Growing concern over the potential impact of the coronavirus on the global economy is boosting haven demand for the metal, which is now closing in on a seven-year high.

Gold, US Dollar Inverse Correlation Weakens Due To Coronavirus Fears

The coronavirus is ravishing China … and may soon ravish the USA as well. As a result, the inverse correlation between gold and the US dollar is weakening and resembles the weakening that occurred during the financial crisis.

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Yes, gold is rising again in the face of coronavirus fears ravaging the Chinese economy.

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The CFTC’s Gold Non-commercial long contracts/futures remains near an all-time high.

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Here is the gold/US dollar volatility surface.

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