Dollar rebounds as euro-zone crisis drags on

By Colin Twiggs
November 3rd, 2011 4:00 a.m. ET (7:00 p:m AET)

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The Dollar Index is consolidating below resistance at 77.50. Breach of the descending trendline suggests the correction is over and recovery of 63-day Twiggs Momentum above the zero line indicates that the primary trend remains upward. Breakout above 77.50 would offer a medium-term target of 80*.

Dollar Index

* Target calculation: 77.50 + ( 77.50 - 75.00 ) = 80.00

Falling Treasury yields warn of money flowing out of stocks

10-Year Treasury Yields are testing medium-term support at 2.00 percent. Failure would indicate another primary decline — and bad news for stocks.

10-Year Treasury Yields

Spot gold looks for support

Spot gold is testing support at $1700/ounce after its recent breakout above the descending trendline and resistance (at $1700). Respect of support would indicate a primary advance to $1900. In the long term, breakout above $1900 would offer a target of $2200, while failure of support at $1600 would warn of a primary down-trend.

Spot Gold

* Target calculation: 1900 + ( 1900 - 1600 ) = 2200

Amex Gold Bugs Index is headed for another test of the upper border of its right-angled broadening wedge formation. The pattern is bearish and breakout below 500 would warn of a primary reversal for spot gold.

Amex Gold Bugs Index

The ultimate result of shielding men from the effects of folly is to fill the world with fools.

~ Herbert Spencer, English philosopher