USDollar Index New High

 USDollar Index Monthly Chart

A historic moment! After 20 consecutive months of range-bound price action and 2 or 3 fakedowns, the USDollar Index (ticker: USDX, DXY) finally broke out the frame pattern and is headed for new highs. What does this mean for gold? Nothing positive I think. Gold is trending down and unless the USDX starts to correct below the breakout level of 100.78, I see no stop for gold's plunge. I am observing a very different trading environment post-elections and I like it - a trending trading environment, which is probably the best, that a trader could ask for; the trends are well-defined, there are no mean reversions and once you identify an intraday trend, it's easy to jump on it and hold your positions for a nice profit, just wait for a pullback to enter. Don't bet against the trends, this is not a winning strategy in the current environment. Also, don't be one of these guys, that wait for confirmation forever, because they're afraid to enter a position, as they're betting too big a position and this drains their mental capital, end up buying the top of the intraday trend and sell the low. I've done this, it's not something you should do as a daytrader. As a daytrader you should be brave and jump into the deep with the head towards without knowing how deep it is, but you have to be prepared to get out very fast, should the market turns against you; you can't afford to hold a position that goes against you more points, than your potential profit would be.

Good luck all and happy weekend,
Petko Bankoff