Major clues in USD indicate Bear market Late summer/ early fall
Hi guys. When trading its always important to learn/educate to find an edge on the markets.
There are so many charts you can access to analyze/compare, etc. Its known that many ticker symbols can be used in certain ways to help understand markets in a deeper way.
The DXY or U.S. Dollar Index is an asset that i use to assess Risk mentality.
So keeping it simple:
If dollar RISES -> it indicates a RISK OFF mentality -> so people leave risky investments to enter the safety that is cash
If dollar FALLS in price -> it indicates a RISK ON mentality -> this means peoplpe are leaving the safety of the dollar to take risk in other investments.
Im bringing you this analysis to assess the health of the broader markets and whether or not we are at risk of a down fall/ recession especially with tensions significantly rising in the Middle east.
So jumping right in.
I got 3 Red resistance trend lines drawn.
This trendline, in part reflects Bull runs in broader markets.
2 from past history
1 which is associated with our current Price action.
As you can see, this Resistance begins at the TOP price of DXY. Price is then supressed from a certain amount of time, before a breakout back ABOVE.
Everytime we have broken the resistance trendline. The dollar starts a massive Bull run when measured:
The 1st one lasted about 700 days
The 2nd one lasted about 460 days.
So the question i asked was how does this relate to the S&P and other markets.
Does the breakout above resistance from the start cause drops in all markets?
When i looked, i was surprised. Fall in other markets does NOT happen right off the breakout.
In fact, when i measured after the resistance breakouts it takes roughly 133-189 days before S&P begins a BEAR market.
As indicated by black lines.
1st example it took 133 days after breakout
2nd example took 189 days after breakout.
We have recently broken out ABOVE the red resistance trendline.
So if you consider previous history, our next Bear market i believe will begin sometime late Summer or early Fall.
Now remember previous history does not have to repeat. It just helps us find patterns and consider things.
It is however possible, if actual war does breakout. Things may change, as it would be considered a Black swan event.
However, until it happens this is the likely scenario in my OPINION. Our current movements i think is just a pullback before continuing higher.
__________________________________________________________________________________
Thank you for taking the time to read my analysis. Hope it helped keep you informed. Please do support my ideas by boosting, following me and commenting. Thanks again.
Stay tuned for more updates on DXY in the near future.
If you have any questions, do reach out. Thank you again.
DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. Do not use my ideas for the basis of your trading strategy, make sure to work out your own strategy and when trading always spend majority of your time on risk management strategy.
There are so many charts you can access to analyze/compare, etc. Its known that many ticker symbols can be used in certain ways to help understand markets in a deeper way.
The DXY or U.S. Dollar Index is an asset that i use to assess Risk mentality.
So keeping it simple:
If dollar RISES -> it indicates a RISK OFF mentality -> so people leave risky investments to enter the safety that is cash
If dollar FALLS in price -> it indicates a RISK ON mentality -> this means peoplpe are leaving the safety of the dollar to take risk in other investments.
Im bringing you this analysis to assess the health of the broader markets and whether or not we are at risk of a down fall/ recession especially with tensions significantly rising in the Middle east.
So jumping right in.
I got 3 Red resistance trend lines drawn.
This trendline, in part reflects Bull runs in broader markets.
2 from past history
1 which is associated with our current Price action.
As you can see, this Resistance begins at the TOP price of DXY. Price is then supressed from a certain amount of time, before a breakout back ABOVE.
Everytime we have broken the resistance trendline. The dollar starts a massive Bull run when measured:
The 1st one lasted about 700 days
The 2nd one lasted about 460 days.
So the question i asked was how does this relate to the S&P and other markets.
Does the breakout above resistance from the start cause drops in all markets?
When i looked, i was surprised. Fall in other markets does NOT happen right off the breakout.
In fact, when i measured after the resistance breakouts it takes roughly 133-189 days before S&P begins a BEAR market.
As indicated by black lines.
1st example it took 133 days after breakout
2nd example took 189 days after breakout.
We have recently broken out ABOVE the red resistance trendline.
So if you consider previous history, our next Bear market i believe will begin sometime late Summer or early Fall.
Now remember previous history does not have to repeat. It just helps us find patterns and consider things.
It is however possible, if actual war does breakout. Things may change, as it would be considered a Black swan event.
However, until it happens this is the likely scenario in my OPINION. Our current movements i think is just a pullback before continuing higher.
__________________________________________________________________________________
Thank you for taking the time to read my analysis. Hope it helped keep you informed. Please do support my ideas by boosting, following me and commenting. Thanks again.
Stay tuned for more updates on DXY in the near future.
If you have any questions, do reach out. Thank you again.
DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. Do not use my ideas for the basis of your trading strategy, make sure to work out your own strategy and when trading always spend majority of your time on risk management strategy.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.