Wednesday, August 19, 2009

Such a tease

As you know we have been obsessed with the dollar for quite a while now and this is the same chart we have been watching for months. As you can see the dollar has become quite a tease here. Still hugging the lower trend line (yellow circles) BUT as you can see, after every move of a touch of the lower trendline has become smaller and smaller - of course the trend line is quite steep as well so you have to consider a breakout into a weaker up trend.

At the same time look at the 50 day moving average (dark blue lines) - SAME thing here with the EURUSD not able to close below. As you can see we are about to turn lower here as the new highs made were contained by the long term trendline off the previous peaks.

To me this chart looks VERY bearish about ready to tip over. As you can see once this chart turns we have a multi month, maybe even a year of trend to follow. You can imagine what this means for equities.

From here I expect a nice move lower after having retest the previous top or last peak and find support back at the 200 day moving average. Timing wise this could play out nicely with equities finding support at 780-820 to move higher before turning to retest and possibly break the march lows.

No comments:

Post a Comment