This blog post is open to the public and highlights what I think is the important factor to be watching now for U.S. stock investors and traders. The direction of the U.S. dollar. I believe a rising dollar (shown here as a falling euro) will be bad for stocks. The chart below shows how at points 1 and 2 turns in euros led turns in U.S. stocks by about three weeks. The euro is now in its third week of a break lower in prices. Can stocks buck the trend of a rising dollar?
click chart to enlarge
1 response so far ↓
1 trader1 // Dec 15, 2009 at 2:34 pm
If my math is correct, I have a possible SC hit on 1/4/2010. It is F13 from the panic on 10/10/2008 and it is F11 counting backwards form Chris’s projected 10/10/2010 low. Cyclically, there is a consistent 4 month cycle which last hit around 11/1/2009 (before that hits in July ’09, March ’09 and you can keep counting backwards). Early January would be a logical time for the next crest of the 4 month cycle. If it is going to play out this way, I would expect a decline into the end of this week or early next week and then a multi-day rally to clear new highs on the DJIA and an associated MACD divergence on the daily price bar.
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