In the intermarket picture we are still dealing with divergences in the performance of Nasdaq and SPP500 which achieved higher highs yesterday, but a more tempered Dow Jones. From an international perspective, US equities were a little more rampant in terms of JPY, GBP, NZD, but clearly underperforming in terms of EUR, which has been stronger. When a market does not rise in terms of all currencies it lacks the strength to sustain a trend. For the same reason we are following gold priced in a basket of currencies. Similarly, gold has been receiving impetus from the same falling currencies JPY, GBP, NZD but also in EUR and USD has shown a surge to a multi-year high. This adds credence to the view that gold could breakout to new highs, together with the USD. Such a scenario would be favorable for our current exposure (net-long JPY, CHF. USD and EUR; net-short AUD, NZD, CAD, GBP and PLN).
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