I shared the chart below with premium members on 9/8. The chart below is the guiding light to how we are constructing portfolios. I wanted you to see this, because this situation represents a huge opportunity if positioned correctly or is going to be very painful for investors on the wrong side of this Dollar breakout/CRX breakdown!
The “Power of the Pattern” in the chart below suggested the markets would be “UNDER PRESSURE” in a way not seen in YEARS!!! I attempt to “enlarge portfolios regardless of market direction“…the chart below is helping achieve this goal in a big way of late!
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When I look back on the 2007/2008 time frame, the “Great Escape” movie comes to mind, due to investors reached a point where they just said “get me out of here/let me escape from all risk assets!” When did the real downside action/waterfall in prices take place? Investors really started heading for the exits when the CRX broke support and the Dollar broke resistance at (1) in the chart above.
Key to the chart above…The Dollar/CRX combo at (2) has created a pattern almost identical to the pattern at (1). It is this repeating pattern that is the guiding light to how we are constructing portfolios. Its all about the Dollar baby and below is an update to the U.S. Dollar!
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The $ is breaking above another resistance line, reflecting strength, that will cause more downside pressure in the “risk on” assets. Last week the Power of the Pattern” reflected that the Dollar was ready to start a new leg higher and the Euro was ready to start a new leg lower (see post here) A good friend of mine always tells me…”a blizzard starts with a single snowflake that fits on the end of your finger!” The above situation represents snowflakes that suggests the odds of a financial blizzard keep growing! (Thanks GF for the reminder)
Snowflakes continue to fall that suggest that GE2 is at hand!
Yesterday morning the patterns suggested the “New Twist” program would be a non-event and that “Risk Off remained the key theme that should guide portfolio construction.” (See post here) Keep in mind that in 2008, the 500 index fell over 50%. Did other assets fall more than 50%? Yes!!! Basic Materials and Silver are two examples that fell over 40% more than the 500 index did in 2008….if the above repeating pattern continues, the “Power of the Pattern” suggests that SMN and ZSL should “enlarge investors portfolios!”
great call on $78.8…dollar rose, hit 78.8 exactly, and backed off now for a likely retest lower or gain momentum to take it out…
Chris K – you are a marvel and a genius…the ability to shut out the why’s and should be’s of all this and focus on the is is a marvelous ability. I’m a total convert.
what about the fib 38,6% around 78,8$ you showed a few days ago
is that of any importance short-term?
I think Russell might be having shoulder problems.