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What a boring day in the stock market. I almost forgot it was even open, and my kids were off school. I took one of them to the mall to shop for clothes. Of course, we were shopping for her, not for me.
Somehow, gold has managed to hold on to support in the $4,000 to $4,200 region. I just don’t think that is likely to last much longer, because it appears to me that the dollar index has further to climb.
From where I’m sitting, the dollar index is at a point where resistance doesn’t appear until roughly 103.5. The potential inverse head-and-shoulders pattern also suggests the dollar index could head back to that level, if not further, with a measured move from the head to the neckline projecting the DXY to nearly 108.
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Since April 2025, gold and the dollar index have returned to their usual inverse relationship. So, if the dollar strengthens as much as I think it could, gold probably won’t survive that move and will likely fall back into the mid- to even low-$3,000 region.
The KOSPI has fallen nearly 9% over the last four trading sessions, and on four-day bars, it’s clear how much the South Korean market has fallen apart over that period. The index has broken below an uptrend and is now sitting at support near 6,380. The stronger Korean won is contributing to this.
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At this point, USD/KRW has fallen through support around 1,340, so the next support level is probably around 1,335, followed by 1,305. Generally speaking, I don’t think this is a good omen for the semiconductor sector here in the US either.
Hopefully, tomorrow will be more interesting. It is CPI eve, after all, and I will be watching to see how much they ramp up the 1-day VIX ahead of Wednesday morning’s news event. I’m going to take a wild guess and say the 1-day VIX closes above 8, and maybe it even hits 15.
-Mike
Glossary by ChatGPT
1-Day VIX (VIX1D): The Cboe 1-Day Volatility Index measures expected S&P 500 volatility over approximately the next trading day using short-dated options prices.
Consumer Price Index (CPI): A measure of changes in consumer prices used to track inflation trends in the economy.
Dollar Index (DXY): An index measuring the US dollar’s value against a basket of six major foreign currencies, with the euro carrying the largest weight.
Inverse Head-and-Shoulders Pattern: A bullish technical chart formation consisting of three troughs, with the middle trough being the deepest, potentially signalling a reversal from a downtrend.
KOSPI: The Korea Composite Stock Price Index, a benchmark tracking the performance of stocks listed on South Korea’s main stock exchange.
Measured Move: A technical analysis method used to estimate a potential price target based on the dimensions of a chart pattern.
Resistance: A price level or region where selling pressure may prevent an asset from advancing further.
Support: A price level or region where buying interest may prevent an asset from declining further.
USD/KRW: The exchange rate representing the number of South Korean won required to purchase one US dollar.
Disclosure
This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.