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Line (2) has been very hard for the Dollar to stay above since late 2010. At the same time the top line of a large Flag pattern is coming into play at the same time at (1). Stocks and Commodities have been soft of late, while the Dollar has undergone a 2% rally.
The Power of the Pattern suggested in the chart below that the markets will remain “Choppy” until this pattern breaks (See Dollar choppy post here)
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It shouldn’t be a surprise that Silver is on support while the U.S. Dollar is up against resistance!
This is key resistance for the U.S. Dollar and no matter how the world looks right now…Resistance is Resistance until broken!
I agree with Chris. In fact I use the $ direction to inform my trading. When it goes up AAPL and the market (e.g. eMini S&P) go down. If it craters our market will rally in a perverse way. Of course real value goes down with the dollar so we net zero.
What’s more revealing is the the Chop-Chop; ShamWow guy is really Bevis from Bevis and Butt Head fame!
Hey Chris,
I like your blog. I check it every day just to see what you’re watching. You make some really good points. Usually I agree, but I have one observation about the USD downtrend line and that is that it didn’t even exist until 2012. I haven’t zoomed that far back, but unless there is a prior anchor point years ago, that line was not the reason it reversed down in Jan ’12. We’ll know soon if it is going to be affirmed or rejected.