• 748 days Will The ECB Continue To Hike Rates?
  • 749 days Forbes: Aramco Remains Largest Company In The Middle East
  • 751 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,150 days Could Crypto Overtake Traditional Investment?
  • 1,155 days Americans Still Quitting Jobs At Record Pace
  • 1,157 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,160 days Is The Dollar Too Strong?
  • 1,160 days Big Tech Disappoints Investors on Earnings Calls
  • 1,161 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,163 days China Is Quietly Trying To Distance Itself From Russia
  • 1,163 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,167 days Crypto Investors Won Big In 2021
  • 1,167 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,168 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,170 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,171 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,174 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,175 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,175 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,177 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

The Only Chart That Matters

How could I forget the only chart that matters?

Figure 1 is a weekly chart of the Dollar Index. This is the same chart I have been showing since June, 2009 - prior to the Dollar Index unraveling. Last week there was a weekly close (price bar with down red arrows) below the low of the immediate positive divergence bar at 75.20. Closes below positive divergence bars (price bars highlighted in pink with gray oval) tend to lead to selling as traders expecting a reversal close out their losing positions. The down trend continues, and as the data shows, there is a high likelihood of the downward move accelerating.

75.20 becomes resistance and a weekly close above 76.58 would end the down trend.

Figure 1. Dollar Index/ weekly

Now let's look at the Dollar Index from a completely different perspective. Figure 2 is a weekly chart of the PowerShares DB US Dollar Bear (symbol: UDN). This is the inverse of the Dollar Index. The indicator in the bottom panel searches negative divergence bars, and we have had a cluster of these over the past 13 weeks. As discussed recently, this can be an ominous topping pattern or a spring board to higher prices - i.e., a blow off market top where prices really accelerate higher. A weekly close greater than 28.70 would suggest higher prices for UDN, which means a much lower Dollar Index.

Figure 2. UDN/ weekly

 

Back to homepage

Leave a comment

Leave a comment