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Regardless of product, after a breakout takes place, often the old resistance line gets retested as support.
The U.S. Dollar has been working on breaking above a 10-year resistance line of late and looks to be retesting the old resistance line as support at (1) above.
The chart below, published earlier this week, reflected that Silver traders looked to be creating a rather large bearish descending triangle pattern (see post here)
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A breakout in the Dollar puts extra pressure on this descending triangle pattern in Silver. A break below support line (4)… which also happens to be the 50% retracement line of Silvers 10-year rally, should cause a ton of Silver owners to run for the exit door, pushing it a good deal lower.
A break of support line (4)/50% Fib level could cause Silver to decline to the $19-$20 level in short order.
Crude Oil looks to be breaking key support today (see Crude support here). Lower Crude oil in the past has not been good for stocks!(see lower Crude prices are bad for stocks post)
Chris, this break seems to be in direct conflict with the USD sentiment crowded trade chart you posted recently. I wonder if the USD is still a crowded trade, even moreso now with this break!! Thoughts?
By the way, it still seems like RISK ON to me with the JNK:LQD ratio chart showing people are still piling into risky assets.