Quick Warning. Tomorrow's (11 Jan) Market Will Open in Red.

I believe that on this week, the US stock market will open below its close of last Friday. I will list the signals that lead me to this prediction:

• As you can see, I'm analyzing the DXY chart. DXY has an inverse relation with the US stock market. Whenever, DXY rises, SPX drops.
  
• In the chart, we see a TD buy setup defined by the red 9 candle, a sign of bullish reversal.
  
• The reversal is confirmed by the TD count flipping to green, marked by the green 1 candle, and then followed by a green 2 candle that has gone above the close of the green 1 candle. This marks the start of a bullish momentum.
  
• On the weekly (chart below), we also see a TD buy setup just three candles before this week's candle.
  
• Looking at the crude oil chart ( CL1! ) (chart below), we notice a green 9 which marks a TD sell setup on both daily and weekly timescales. This suggests that oil is going to start a correction that lasts one to four weeks. This means the dollar index (DXY) rises and the US stock market (SPX) falls.
  
• On top of that, the Euro vs USD is showing signs of bearish momentum. That's of course another inverse relation. EURUSD falls, DXY rises. See Related Ideas below for my analysis on EURUSD .
  

DXY Weekly: TD Buy Setup followed by a bullish pin bar.

CL1! Daily: TD Sell Setup.

CL1! Weekly: TD Sell Setup.

Expectation on how this continues:
I do not expect a bullish momentum in DXY that takes longer than two weeks, nor one that crosses the descending resistance line starting from March 2020. The path I drew on the chart just says exactly what I'm anticipating, a sharp rise followed by a sharp drop, either right after, or a week after. Such a short-lived reversal, aka a dead cat bounce, is typical when a TD setup completes prematurely. In this case, the red 8 candle is a doji and the red 9 candle is a solid green candle, meaning that the reversal came a little bit too early. That's why we call it a premature reversal.

Actions
What does all that mean in terms of actions to take. Well:

• I would advise to reduce your leverage. Expect a correction in the entire stock market.
  
• Take this as an opportunity to invest long-term in stocks with high potential but low market cap. These stocks usually drop significantly at the slightest scares. The stock I recommend is LMND. See my related idea below.
  
• Do not scare when heavy stocks like AAPL or AMZN go down 5% in a day. A 1% rise in DXY can cause that. This is not a sell-off, it's simply stocks adjusting their prices because the dollar is slightly more valuable. See my AAPL and AMZN ideas linked below.
  
• TSLA is a special case. I don't know whether to classify it as heavy market cap or a light-weight stock that will drop 10% with a slight scare. I guess it depends on the scare. But let's stay safe, watch and learn.
  

Thank you.

Comment:

DXY is even weaker than I anticipated. We'll wait to see if it hits the descending resistance by going sideways or if it drops even before that.

Comment:

The weakness in DXY coincides with the big spike and even bigger drop in bond yields. Also oil didn't even budge and it continued upwards. Intel stock jumps today by 8% because of the news of replacing the CEO..... These signals show just how much room there is indeed in the S&P 500 to grow!