Last Down Week for Stocks. Last Up Week for the Dollar.
#dollar #dxy #stocks #stockmarket #spy #dji #nasdaq #bitcoin #crypto
Traders,
The dollar is now starting 12 weeks of green. You can see that today it has touched the top of its channel and that has acted as resistance. Additionally, the RSI shows that the dollar strength is now over-extended. I smell a pullback coming very soon. Possibly before the weekend.
The SPY (which correlates in part with other major indexes) has this Head and Shoulders pattern in play. Target down is 410. But as I questioned in one of my last videos, is it possible that the target down will be cut short - held up by the 200-day sma which closely correlates with the bottom of my channel? This will act as a huge area of confluence and give the SPY good support. It is possible that the SPY is held up from falling further at this point and this makes sense when looking for clues from our dollar chart.
A fall in the dollar would likely correlate to a bounce in stocks. I believe it is reasonable to conclude that stocks will end their pullback soon and we can expect a bounce upward at either the channel bottom OR our target down of 410. Though, I am not sure that the SPY will maintain its posture within the ascending channel, I do not believe this is the end of our upward movement and blow-off top in the stock market ....YET.
Best,
Stew
