Last Friday I shared the chart below with Premium Members, reflecting that the Dollars rally had taken it up to a falling resistance line, which suggested we should see a Dollar decline and a rally in equities (see post here)
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Below is an update to last Fridays chart…
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The Dollar broke above the 23% Fib resistance level and now is testing the old resistance as support this afternoon! The awesome John Mauldin has often been quoted as saying-“The Dollar is the worst currency in the world, except all the others!” What the Dollar does here will bring out the best and worst in portfolio construction!
The quiz yesterday reflected an ETF that is the focus of the medias attention (see quiz here). I suspect what the Dollar does here will become the focus going forward. Even though the markets have seen its share of volatility since the end of July, “brace yourself” for a ton more due to the dollar’s situation right now!
Barcelona…Thanks for this comment and making me aware of the email typo error. I posted this morning an update on the Euro, reflecting the opposite of the Dollar, per the Euro is kissing resistance as the Dollar is testing support. Being the boring guy I am, I remain focused on the currency patterns at hand. I doubt we will know the outcome of the currency support/resistance test for a few days. I do feel that the next few months equity action is all in the hands of these currency patterns.
At this time the odds favor the Dollar will move higher.
Per the Great Swami…I haven’t heard from Johnny Carson in years, boy do I miss his show! 🙂
Hey Chris…stumbled on your blog this week. Really enjoy your technical perspective. Very insightful. Sent you an email for premium info so I’ll wait for your email. BTW, is your email above correct? Bounced back so tried kimble… with “le” not “el”.
Question I have is regarding this coordinated Hail Mary pass yesterday. Do you think it will weaken the dollar (hence market rally) due to more likely printing immediately or does the dollar look to rally off #2 or decline further? I’m leaning short on a FAZ position and feel the tide went out on me yesterday pretty convincingly. Oh tell us Great Swami… 😉
Many thanks!
Hey George…glad to…please send me an email at [email protected] and in the header put premium membership info. I will get you info ASAP.
Thanks and honored,
Chris
Hi Chris,
Please tell me about ysour Premium Membership. Thanks.
George Sachs
Robert…$ resistance last week I suspect has had a ton to do with stocks rally this week. You mention the Fed’s help in Greece, I think the rally is due to the quiz of yesterday. 😉
The setup was completly there from a Power of the Pattern perspective, to see a powerful rally coming out of Europe.
Chris ,,the dollar today is at 76.79 ( down around .62 )-so its now off line #2 ( at 76.31 ),it has not at least today broken the old support at #2 line .Yet stocks are higher today –mainly because of market intervention by the various Fed’s to help Greece etc.
This kind of confusing—so if the dollar breaks support at #2 ,which means the dollar drops lower than Stocks should continue to rally ?