On the heels of the continued smash in the gold and silver markets, here is a look at stocks, the US dollar, euro and the panic in the gold market.

Stocks, Dollar, Euro & Gold Panic
August 15 (King World News) – This is from Andrew Adams at Raymond James: S&P 500 Fails Just Under All-Time High – Like after a big Thanksgiving dinner, global stock markets have been dealing with some Turkey-related sluggishness. The S&P 500 was just points away from a new all-time high last week, but was unable to make it above the threshold. Instead, over the last three sessions it has traded eerily similar to how it did just before its quick, early February sell-off – gapping down from near all-time highs before following that up with two more volatile sideways sessions…

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Back in February that sequence then led to a 2% down day to kick off a more meaningful decline, but, to be clear, we are not expecting a repeat of that decline this time. Should the near-term weakness continue, however, we think the most likely horizontal support zones will be found near 2821, 2790, and 2740, with a diagonal trendline also in the mix (green dotted line). Resistance will continue to be expected near the 2872 all-time high, but the area around 2850 has also developed into a level of interest that will likely increase the selling pressure just above the current index level.

S&P 500 Fails To Make New High

U.S. Dollar Index Breaks Out
We noted in last week’s report that the U.S. Dollar Index looked to be challenging the upper end of its recent trading range and that it could be on the brink of breaking out. Well, that has now occurred, with the dollar definitively thrusting above the 95.25-95.50 area we were watching closely. This breakout implies a stronger dollar is now the expectation. The index has rallied up more than a point above the previous resistance zone, but the area around 97.50-98 looks to have been of importance historically, too, and could come into play in the weeks ahead.

US Dollar Breaks Out

EURUSD Back Under Critical 1.15 Level
The EURUSD is by far the largest component of the U.S. Dollar Index (57.6% per Wikipedia), so it’s not too difficult to see the main reason why the index is breaking out to the upside. The U.S. dollar has completed what looks to be a lopsided head-and-shoulders pattern against the euro and is now back under the 1.15 level that has been important on many occasions over the last three years. This, too, suggests the dollar will continue to strengthen against the euro (sending the EURUSD pair down).

Euro Breaking Down As Dollar Strengthens

Panic In The Gold & Silver Markets
King World News note:  The US Dollar Index completes a reverse head & shoulders pattern near the 98 level, about a point higher than where it is trading today.  In the meantime, the commercial hedgers are most likely long the gold market for one of the few times in the past 24 years.  We will know when the next two COT reports are issued since today’s trading action won’t be counted in this week’s figures.  

There is definitely panic in the gold, silver, and mining sector as we move into the final stages of capitulation.  We are witnessing a major bottom forming in the gold and silver markets as the commercial traders and bullion banks continue to take the other side of the trade from the crowded hedge fund shorts.  When the time is right, they will take the price of gold violently higher and crush the hedge fund shorts.  Silver will trade similarly to the upside.  Remember, the banks always win.  It’s just a question of when they pull the rug out from under the overconfident shorts. ***ALSO JUST RELEASED:  Celente – This Is The Real Reason Why Global Markets Are Tanking, Plus A Note On Gold CLICK HERE TO READ.

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