Wednesday, December 21, 2011

Charts and Commentary

The Daily Chart of Dollar Index
Prices appear to be climbing higher and chewing through the previous cluster zone as I expected. The midpoint is marked with a dotted orange line to further illustrate the strengthening price movement. Remember all of those who said double top in the dollar? I see a higher high with price backtesting support of what used to be resistance. The dollar's resilience in the face of sharp upside moves from equities is encouragingly bullish.

S&P Triangle Formation
Triangles are a continuation pattern but can often morph into different and larger developing patterns. For now, we should expect a break of the triangle in the next several sessions. Prices are likely to take the least path of resistance, but needless to say if an advance is proven correct, the upside is limited. Seasonal periods are accompanied with light volume so it is unlikely that price will generate a significant game changing move.

S&P - Points of Resistance
This is a follow-up of the previous chart to illustrate the overwhelming resistance overhead for price. Do understand that any rally attempt will be short-lived and quickly given back.

S&P Moving Averages 
Now looking for the 10 day MA to cross the 20 day MA to validate the bearish alingment of these 3 moving averages.

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