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The Dollar broke from a bullish falling wedge of late. Shared this Dollar action was about to take place, before it did (see post here) , creating numerous challenges for stocks and commodities. The rally in the Dollar has taken it up to falling resistance and the fib 23% level at (1). A natural place for the Dollar to take a breather.
If the Dollar does take a breather, one could see the NYSE catch a little bounce due to the support at (2).
Key strategy … be aware/positioned for the ripple effects if the Dollar blasts above the resistance at (1)! A further advancement in the Dollar increases the odds the NYSE will break support!
The lines dating back to 1987 and 2000 continue to have my attention…
@ belsha good call ..the fight is on between Dollar Resistance, and Equities Support but also be aware there is another Head & Shoulders with a Neckline at ~ 8250 with a target below the present Support line at(2)which is another fight to watch
Funny, a smaller H&S seems to have already happened, with april head and march and may shoulders, with a 8200 neckline, we would be right at target here! I just wonder if similar patterns show up on the SP or the Dow.
Belsha…great eyes and I would agree with you….Potential H&S already in place and this support line is the neckline??? Look out below?
If the NYSE rallys back to 8600, would we have a nice Head&Shoulders with a target at 7400, a well tested support from Dec ’10 lows and Jan ’10 highs?