Wednesday, July 26, 2017

Marginal new Highs on Dollar Weakness

Market Outlook: Marginal new highs still possible for major indexes. Focusing on risk instead.
Market Indexes: Marginal New Highs for DJIA, SP500, ES, NQ, not RUT today

The U.S. Dollar Index took another leg lower on the FED's FOMC statement today and solidly broke it's prior 1.618 Fibonacci extension. The Dollar's (DX) chart is below. While there could be back-and-filling, there is not a level of double Fibonacci confluence until 92.147, and with the slow stochastic still embedded, there is 'currently' nothing bullish on the chart. A key reversal bar would be a start, but is not to be seen.

Daily US Dollar Index (DX) - Double Fibonacci Confluence at 92.147

With the new daily high on the DJIA, the trend lines have changed again - back to the original contracting diagonal we were counting.

DJIA Cash - 4 Hr Chart - Diagonal

The new trend lines would we drawn between waves (ii) and waves (iv), if wave (iv) occurs properly.

Many market commentators today noted the new low on the $VIX. However, just keep in mind the daily $VIX did have a key reversal bar today by the time the cash market closed. The key thing to keep in mind while the market continues to wedge is that most of the increase in prices is due to the Dollar, not due to solid economic growth.

Be good. Be flexible and patient. And have a good start to your evening.


  1. Thx for the update. Do you think the dollar reaching a bottom will time with the market peaking?

    1. Not precisely. The Dollar and the Stock Market certainly went up together during 2016. Correlations come and go.

  2. The dollar is in secular decline. Not sure how it is going to be a decisive element of DJIA EW analysis if its decline merely continues, unless the resolution is upwards.

    1. The first statement is an opinion offered as a fact.

    2. Define 'secular' then. If it involves more than prior days, it is a prediction which is an opinion.

  3. Replies
    1. Hardly seems like the term secular applies. You have cited 30-weeks. The economic definition cites "indefinitely long period". And the original definition (Roman) is centuries long. See below.

      (of a fluctuation or trend) occurring or persisting over an indefinitely long period.
      "there is evidence that the slump is not cyclical but secular"
      occurring once every century or similarly long period (used especially in reference to celebratory games in ancient Rome).

      Seems like you just want to be argumentative, and that won't be allowed on this site.

  4. The USD found a 15 Year Super Cycle top in early 2015.

    1. Then why did both 2016, and 2017 both have higher prices for the Dollar? You have no idea what you are talking about, and any future nonsensical / argumentative posts will be deleted.

  5. There are reliable EW analysts who point to that 15 year top.

  6. Regarding my statement concerning the EW context of the thirty week decline, see the green SC on
    page 11 of today's OEW stock chart, labeling a possible cyclical top. Others have that turn earlier. You may not agree with OEW. and I'm not arguing anything; rather making an observation, right or wrong, that the dollar is in long term downtrend.