Thursday, March 18, 2010
Watching the $
This index is worth watching right now in my opinion! Looking at the daily chart the US Dollar is now setting inside of the support trading band. Most recently that trading band has been bullish. Price has been above the band for sometime now. That band has turned neutral.(sideways)_In other words it's not trending up or down but has turned toward the 3 o'clock on the chart. Is this distribution or rest and pause before a third leg up since finding support at 74.21
Looks like a good time to start watching the short term trend on some of the majors. Personally the shortest time frame that I chart on the currencies is 3-minute. Other than that I'll also watch my charts set to 133tk, then a 1 hour with pivots and also a 2 hour with a 34 hi-lo-close ema trading band. Then of course once/day I'll look at the daily. Once/week I'll look at the weekly. Once/month I'll look at the monthly time frames.
I know this post sounds indecisive and it should. That's where the market is at this point. Undecided! But, the effects of direction in this currency could effect the price in commodities, bonds and stocks.
The recent run in the stock market with light volume is not a very convincing breakout! When the pullback comes we should look to find support at or near the breakout point that everyone talks about. 1145-1150 on the S&P! We could possibly see a high of 1227 before that pullback happens. Then I expect to see the VIX to continue moving up with price for sometime. Most people associate a rising VIX with falling prices in stocks. But that is not always the case. Volatility also occurs to the upside not always the downside.
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