Options trading investors and the others have been awaiting a correction in this bull market, and it may have already happened. The stock market has a way of slowly unfolding, making events look and feel minor, then before you know it, the correction is over and it’s back to an uptrend. That is kind of how this one unfolded.

There was a drop of about 4.5%, and we are now in a long trade and in the money by 2.5% with very little down side risk at this point. Time will tell if this up trend is sustainable or not. Now, let’s take a look at the charts…

The dollar looks to have started a breakdown on March 30. If there is continued selling pressure in the next couple days then expect for stocks and commodities to move higher as the U.S. Dollar drops. It is important to know that when a bullish pattern fails we typically see a very strong reaction in the opposite direction (down) catching the majority off guard. They then rush to the door.

US Dollar Futures

SPDR S&P 500 ETF (NYSE: SPY)

We watched a few weeks ago as the market went into a free fall creating a washout bottom. From there we saw prices bounce back and retake my key moving averages. This gave us a bullish bias and dips should be looked at as buying opportunities. I will admit that stocks still have a long way to go before the masses are convinced. I feel we need to see the February and March highs get taken out first. Once they get taken out there should be strong buying as short covering (protective stops from traders who are short) causes a surge in buying pressure sending stocks sharply higher yet again.

SPDR S&P 500 (NYSE: SPY)

Gold

Gold has been moving up this year but the current price action is not really getting me excited to buy just yet. Recently we have seen strong selling volume and very light buying volume. My bias still favors higher prices but there is still a good chance we get another dip in the coming sessions.

Gold Futures

Mid-Week Trading Conclusion:
I feel as though the dollar will trigger the next wave of buying in stocks and commodities for the next week or two. We should see the dollar make a clean move in either direction shortly and that will help guide my analysis, positions and setups.

If you would like to get my mid-week reports free please join my free newsletter here: https://www.thegoldandoilguy.com/trade-money-emotions.php