Last Friday the “Power of the Pattern” was reflecting that the U.S. Dollar was breaking support on a daily chart and looked to be creating a rather bearish upside wick on a weekly chart…both suggesting lower U.S. Dollar prices were ahead (see post here)
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Why has the risk trade worked this week and Interest rates headed higher/lower govt bond prices? Odds are high the breaking of support by the U.S. Dollar has much to do with this. The upside bearish wick last week was not bullish for the Dollar and the break of support has brought in a ton of Dollar Sellers the first 3 days of this week.
As long as the EUR/USD holds 10 week MA I think we should be fine. If it closes above 10 week MA have to clear half my position. It should hold if this is going to be a real dollar breakout.
Yogi…Dollar breakdown is good for the risk assets and good for TBT too. I believe it is good to be aware of macro themes, yet I let patterns drive portfolios. The TLT/IEF breakdown is a good sign for the macro economy and the best news at this moment we can ask for. FCX holding at 15-year support and taking out overhead falling resistance is very good news too!
Hi Chris,
The breakdown seems to be good for risk assets and trades therefore we see the stocks rallying.
The dollar breaking support and moving lower, where does that leave the possibility of GE2 coming? Or is this more of a short term break of support and we could see the stock market lower?
As of now, the S&P 500 is above the 1205, what do you forsee going forward?
Thanks