CLICK ON CHART TO ENLARGE

It’s not the odds of something happening that is important, its the impact if it does! 

The odds were low that IYM was creating a bullish right shoulder in late November (see post here) , yet the impact of this pattern has been big for non believers…either by missing out on the 60 day rally (two month rally) or being short while the 500 index has moved 10% higher.

The odds might be low that the U.S Dollar could be making a bearish Head & Shoulders topping pattern, yet if this pattern is true, the impact on portfolio construction will be huge!

CLICK ON CHART TO ENLARGE

Sentiment numbers are at multi-year extremes in the Dollar and Euro right now. 

With sentiment at these levels, if the H&S topping pattern is correct, the impact would be HUGE in the currency markets and greatly impact portfolio construction!