Retail Sales, the Dollar and Gold

Stocks are opening lower today (although ARA is up a little) after some disappointing retail sales numbers. Although wall street is not liking the release, the dollar's recent strength has not been affected by the "bad news." In fact, the release provided a nice opportunity to establish a short position on the Eur/Usd pair.

There was a small "head fake" right after the retail sales figures, but then the dollar took off. I didn't trade up on the head fake, mostly because this wasn't a big enough economic release, and also because I already had a substantial short position on the Eur/Usd. Here's a 1 minute chart to show you how the price action reacted to the news.
As you can see from the chart above, there was a pretty good opportunity to squeeze a few pips out of the pair after the retail numbers...although I'm still short because I still think the primary trend is down and it probably has several hundred more pips to go.

For now I will keep doing the same plays--shorting gold and shorting the Eur/Usd. Gold has been exhibiting some interesting price behavior and I think it will likely fall sharply in the near future...although, note that Moise at Alpha Global Investors thinks that gold may break out to the upside and that we should wait for a break out one way or the other before entering, which is probably prudent advice because he is right quite often. As I say, only time will tell (and price).

Good luck out there.

TLT