Downside wicks usually take place at market lows or at support. The chart below, highlighting several downside wicks and a bullish falling “PATTERN” was the reasons to go long the 5oo index on 9/1 (see post here).
Click on Chart to Enlarge
The S&P 500 had its best September in 70-years bouncing off this support, after it created these “downside wicks.”
The U.S. Dollar is testing key rising support and created a fairly long “DOWNSIDE WICK” yesterday, in the chart below.
Click on Chart to Enlarge
With the Dollar on support, only 3% Dollar bulls and now with this long “downside wick” taking place, all the more respect for this pattern is at hand and understand that a rally in the Dollar, could be ugly (see post here) for many asset classes!!!
KEEP STOPS TIGHT TO PROTECT GAINS…
“Silence Doogood” does not get it. One of the things I really like about this site is that there hardly any low-energy ranting and raving in the comments. Hope it stays focused on the objective (chart patterns),interesting, and fun.
John,
Yes, UUP is a good tool should the Dollar rally.
Hello…what do you think of the ETF “uup” as a way to play any dollar rally? Thanks…best, -J
C. Kimble,
Is your name really Chris Kimble? C’mon Ben, no need to use pseudonyms to sell your fiat dollars…. Ok, if you aren’t the student of the “Great Depression” ( benny boy) why would you care to prey on those who don’t know any better…. Why do you prey on those who week after week, month after month, year after year listen to the same song over and over again (green shoots) (recovery has begun) ( we have gained 13,000 new jobs unfortunately the unemployment rate has risen twice the 13,000 new jobs) Why do you preach lies to those who are so afraid of the inevitable ( you know and so does that idiot benny boy that the pinball machine has been tilted….. GAME OVER…. Thank you Woodrow Wilson for selling out the Constitution back in 1913… Thank you tricky dick for taking us off the gold standard, Thank you Bill Clinton for repealing the Glass Steagall Act which gave banks (CARTE BLANCHE) the go ahead to gamble with our money, Thank you George (I wanted to get the guy that my father hated) Bush for the many who died during your cry FOUL… WEAPONS OF MASS DESTRUCTION along with the debt your posterity will pay to China so you could avenge your daddy’s enemy…… All of you, from Wilson to Bush should have followed the CONSTITUTION…. Article I Section 10 for starts!!!! Hey Chris, you be sure to tell your believers about the CONSTITUTION… Explain to them what was meant by all debts shall be paid for with money coined in silver and or gold… And HOW NO STATES SHALL EMIT BILLS OF CREDIT and let them know how T. Jefferson warned of the danger of a bank… THEN MAKE THEM FEEL GOOD WITH A FORECASTED GREENBACK RALLY… THE SAME RALLY THAT HAS HAPPENED IN SHORT SPURTS THANKS TO THE FEDS PRINTING OF MORE PAPER WHICH ONLY DEVALUES THOSE PRETTY COLORED FANCY FRN’s…. HIP HIP HOOoooo RAY, HAPPY DAYS ARE HERE AGAIN…. SOMEONE WILL PROMISE TO PUT A CHICKEN IN EVERY POT !!!!!!!!!!!!!!! THANK YOU C. KIMBLE for your great feel good info….
If this spells danger for basic materials, then is TCK.B ripe for “scoring on defense” Chris? Thx
Good to have natural resources for sure Brian!
Recall the first of June that the Euro was a piece of you know what and was about to break apart? PIIG countries were the daily talking heads main topic and the dollar was the choice currency! How things have changed in a few months.
So when you ask…will those days ever return…a few months can change many things!
So the Aussie doller hits parity with the greenback, who would have thought it possible only a short while back when they were referring to the Aussie as the Pacific Peso. But it just goes to show what a backyard full of gold, silver, diamonds, iron ore, coal, natural gas, nickel, copper, bauxite,zinc and uranium will do for your economy. No wonder they call this joint – “the lucky country”, no wonder indeed. The only problem is I’ve always enjoyed sending big swags of USD’s down here and getting up to 100% in Aussie dollars on the exchange. Will those days ever return?
What ETF, options or index ( what are symbols ) would you use to out your observations in place? Would you email me your response. TU!
Yes, I agree that it is time for a dollar rally. Yesterday we had a DOJI on the candlestick chart. The doji usually comes in at market tops and bottoms and signifies indecision. Also it seems that everyone is talking about the demise of the dollar and Washington printing more worthless paper to prop up the economy. Crude oil also looks toppy and a dollar rally and a selloff in crude would create the “perfect storm” for the long awaited stock market correction. The move in Google today might be the “grand finale” to this insane rally in stocks.
that helps a lot, thanks.
KY…
This is really a individual question/issue. I like around the 4% range. Sometimes I pull it tighter when resistance is at hand, in a good uptrend I feel we should back off a little and let them run.
With the 500 index at resistance and the dollar on support with 3% bulls, I lean to the tighter side.
Hope this helps a little.
Chris
Mr. Kimble,
Thanks again for all these wonderful updates.
re: “Keep stops tight..” what percentage trail are you using?
CK,
Not premature at all to long the dollar, with a stop, I like the idea a ton!
What I am most interested in and focused on will be the protection of gains and the potential to score on defense.
Game plan thoughts…if the dollar rally is real and puts pressure on two groups, stock and commodities, what combo of these two will get hit the hardest??? Basic Materials!!! which are tied to the stock and commodity markets.
Not there yet…but hunting for the patterns!
Hi Chris,
Thanks – nice graph as usual.
Assume you would do a follow-up if the trend reverses and it is a good idea to go long the dollar (uup)and/or short the euro (euo). But it premature to go long now?
Theoretically, a dollar reversal/rally would not really impact the TBF recommedation in terms of tightening the stop loss.
cK
Andy,
Welcome to you and all new viewers. If the Dollar does find support and rallies from here, it should put downside pressure on stocks and Commodities
Appreciate your viewership and question,
Chris
Chris,
I am a newbie so bear with me. From this post and the good bad and ugly post your charts are suggesting that the S&P and dollar will rally together and its time to sell emerging markets and commodities?
Thx