After the Treasury announcement this week, the dollar index traded sharply lower. Along with this, oil and commodity prices moved higher as should be expected.
The market is currently in a downside range expansion. The sharp trade below the blue line (two standard deviations down from the mid point) indicates that the market is oversold and due for a correction or consolidation on a short term basis. If the dollar index fails to regain the 84.00 level and hold, it would be a major negative. The trend is turning down.
The longer term chart of the Dollar Index indicates a major double top with an extended right top that found no new buyers. This is potentially extremely negative. We will put that chart up tomorrow with some analysis.
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