All About the Benjamins
- Posted by Greg Harmon
- on May 18th, 2012
News has been driving the the markets lately. Europe, China, student debt, you name it. To a technician this means a need to look at inter-market activity. Doing so has revealed some interesting macro trades setting up. I wrote about one yesterday in A Buy Signal In Gold. Today the US Dollar Index is at a critical point. One where that Gold trade has confirmation or rejection. But also where a longer term trade on the US Dollar Index itself is emerging. Take a look.
The US Dollar Index ($DX_F, $UUP) has been bouncing along the 4 year extended rising trendline (dotted blue) since February. Consolidating without direction in a tight range between 78.5 and 80. it finally broke that range and moved higher in May and is now testing the neckline of a 18 month Inverse Head and Shoulders pattern. I put the neckline at about 81.60 and a break above it triggers a price objective of at least 90.60. Rejection here or a break over and throw back has support at 78.65 and a move lower under 78 would invalidate the pattern. Not a bad reward to risk for you longer term traders and investors. Risking $3 to make $9. This type of move of course would have massive implications in other markets. Are you ready for it?
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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