All About the Benjamins

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?

Graphic

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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.

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