chartwatchers

DXY - Possible megaphone topping pattern

TVC:DXY   US DOLLAR CURRENCY INDEX
1251 18 44
The US Dollar Index             broke out of its range last week.
At the first look it is a great buying opportunity as we run to new highs.
Normally this kind of breakout would be a buying opportunity. My problem here that we are too late in this intermediate cycle to have a follow through after this breakout.
There is a decent chance that banks used this breakout last week to get out of dollar long positions and next week the smaller players will be left alone with their dollar longs...

The megaphone pattern is always showing uncertainity and chaos. In these patterns every new high and breakout usually a false signal.
If I'm right and this is a topping pattern next week instead of running higher price will drop back into the megaphone and we will have a steep decline to the lower trendline in the following few weeks.

MACD and TSI             is signaling divergencies.
If price is reversing early next week I will immediately enter with shorts here.
reefque
18 days ago
analysis with conviction..well said!
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happyluckydog
18 days ago
thanks.
+1 Reply
CalGreens
18 days ago
Thanks
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FFMEO
18 days ago
Thanks for all 4 summaries and shared idias
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paletz
18 days ago
Agreed, it looks like it will bounce down. The major crosses like EURUSD, AUDUSD, GBPUSD also seem to be about to reverse.
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chinoo
18 days ago
Sorry...... Analysis is wrong !
This is certainly a Dollar breakout !!
A lot of PM investors do not believe in this dollar breakout but .......... this will have serious implications on the PM sector ... with each day dollar settling higher will force the Long PM sector investors that it is time to run away from the Mkt !!
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chartwatchers PRO chinoo
18 days ago
@chinoo, Hi Chinoo.
1.Gold can rally along the dollar.
2. If this breakout fails it will be a failed breakout and the megaphone pattern will suck price back like a black hole.
I know almost everyone is bullish on the dollar. I see a megaphone not a breakout.
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chinoo
18 days ago
Never ever understood you chartists .... why does the arrow points down and not up ...
with yr assumptions, u all tend to lead yourselves and a lot of other humanity into trouble .....
my simple advise to all the chartists is .. draw a chart ... make yr projections .. but don`t be so cocksure as to where the Mkt or the underlying instrument is heading ... leave that to Mkt ... u might be trusted more !!
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Nightstar chinoo
18 days ago
@chinoo I think you need a few more tools in your toolbox ;)
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Ngonidzashe_1990 chinoo
18 days ago
@chinoo, Sir/madame just above you made a prediction and you sounded substantially "cocksure" about your prediction. Why, then, throw shade to someone with their own analysis and predictions. This platform is exactly for this, people to air ideas. Put plainly don't shoot down fellow traders. We all are in this to make a living and to LEARN. Drops mic.
+1 Reply
TheBanker PRO
18 days ago
shorting thin air isn't on my bucket list
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Ngonidzashe_1990
18 days ago
I like you analysis and passion for the trade. Keep it up man !
+1 Reply
chinoo
18 days ago
Look Guys… I certainly believe that the author of this idea is a very learned and gutsy fellow ... who sticks out his neck and presents his views, the way he analyses them ..... so I sincerely apologize for my above mentioned contrarian views, as they seem to have stirred a few good Samaritans here.

Further, to explain on my view ( which I would not be doing anymore ) ... I believe that the market is expecting a huge fiscal stimulus from the new US administration in the form of infrastructure spending and tax cuts that will itself spur growth and spark inflation, which will put pressure on the Feds to tighten the monetary policy and increase the US interest rates at a faster pace than earlier.

I am also of the opinion that the new US admin might also look into all kinds of trade imbalances which are there today and might re-negotiate the same in order to create more jobs and spur the economic activity at home.

This all will keep the dxy on the upward trajectory!!
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Cuco67 chinoo
17 days ago
@chinoo,Have a look at the US debt structure. http://www.justfacts.com/nationaldebt.asp#ownership. Would you say that it is in the interest of the US to have a strong USD? Stimulus means more debt, tax cut means less income.
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shawn.ctech chinoo
17 days ago
@chinoo, You are getting way ahead of yourself just like the market. equities move ahead of actual data. You wont be saying this after first and second quarter GDP numbers. Growth wont come until 2-3 years after spending. So, first lets take care of the recession we are about to hit next year before popping the Champaign bottle.
+1 Reply
chinoo shawn.ctech
17 days ago
@shawn.ctech,

Buddy ... Mkts move and anticipate events much faster than Bolt !!
Yr reading of the Mkts displays that u r much far behind the curve ...
now, pls do not react frantically to my this statement :-)
Let time show what is correct ........... !!
Probably best to keep the BP in check !
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shawn.ctech chinoo
17 days ago
@chinoo, Sounds good to me. It seems like you are also behind the macro curve. I'll say the equity market will decline toward the end of Jan. or mid Feb. due to the stronger Dollar, lack of liquidity, and lower GDP data Lets bet on it in public :) Hey, I love whisky. How about a nice bottle on whoever is right? BTW, when you get a chance before you go too forward read up on the backward federal reserve calculation on growth and you will realize no matter how much spending, first you have to deal with what is baked in.
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traderzaius
17 days ago
If you nail this megaphone, you will be a legend!!
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