| Stock Chart Patterns of the $USD BBH OIH $HUI |
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| Monday, January 23, 2006 |
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Nightly Update - USD, HUI, OIH, & BBH
The US Dollar (USD)- Daily Chart
The dollar got hammered today, and broke down out of a bear flag. Short to intermediate term, the dollar is bearish and tanking. The USD is breaking down out of an ascending triangle pattern. Indicators and oscillators are bearish. However, one good thing about the dollars descent is that it injects liquidity into the US markets. This directly affects commodities and causes them to go up. This is especially good for stocks in the gold sector. I believe the USD will eventually form a large inverted head and shoulders pattern on the weekly once it hits the 82's on the weekly chart.
The Gold Bugs Index - Amex (HUI)- Daily Chart
The daily chart of the HUI illustrates that it is currently forming a bullish pennant On the weekly, the HUI is breaking out of a slim jim pattern and is doing what it is supposed to. As you can see, the Aroon is in a bullish trend. The PPO continues to make new highs along with price as is the RSI. Finally, the stochastics are bull flagging. Stick with the leaders and the front runners, such as NEM, GG, ABX, and GLG, you will be fine. There are no hints that a correction is about to start. Dump your precious metal laggards now and get into large caps. Again, the trend is bullish and the PPO continues to make new highs along with multi year/decade highs in price.
Oil Services Holders ETF (OIH) - Daily Chart
The daily chart of the OIH illustrates that it broke out of an ascending triangle in late November 2005 and has rallied higher ever since. The OIH has been parabolic up and that is not a pattern, you can't trade that. However, sometimes you get the best gains when indicators are overbought. Indicators and oscillators are bullish, and stochastics are bull flagging, and volume has been strong. Nevertheless, our energy stocks are doing well and I have not issued any sell alerts yet. We currently have 6 energy stocks.
The Biotech Holders ETF (BBH)- Monthly chart
This has been one of the worst performing sectors this year. On the monthly chart of the BBH you can see that it is still in it's 2 month pullback. It is in the process of forming a bull flag. Once it breaks out of its recent down trend channel I would not be surprised if it retests its previous high at $238.15. The BBH is the laggard biotech index because AMGN and DNA are still waiting on catching some bids. The BBH will not begin to rally until these two stocks start participating in the move.
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