Looks like the stock market and cryptocurrencies along with equities are about to see one final leg up. Expect DXY to get rejected from this 0.702 fibonacci level on the daily chart.
Hi, while googling "short set up for 0.702 fib" your idea popped up. Incidentally the reason I searched for it is because I'm looking at the DXY chart. I know from research the 702 fib is a common retracement. I also see you have trendlines and a level of rejection of 236 fib price action might hit. The reason for my comment is that I'd like to hear you explanation of short confluence that gives you enough confirmation for your trading stratagy to open a short trade or are you only basing it from the fib level of probability, which from the chart I would think not.
@michaeldouglas1915, hi, thanks for your comment. On the basis on Fibonacci, assuming the top is in, the short is in play. However, I am also paying close attention to the 1929 prop into the Great Recession. If you take a bars pattern from 1929 into the recession and overlay it onto todays chart, $32,000 is actually the bottom, before an impulsive blow off top takes DJIA to $42-43k before the recession kicks off. This second scenario actually seems more likely, especially as a lot of assets have not even begun their bull markets yet. Oil also looks to have topped which normally means money flows back into equities.
michaeldouglas1915
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@missedamillion, Are you implying that if the DJIA bottom is actually 32k, then potentially the DXY could still have upside left as DJIA hasn't yet bottomed?. Its getting close DJIA is at $32.900
I would say the DXY is backed by oil, and oil has topped for now so I would assume the DXY is next, which will allow equities to start finding higher prices like you said?
Using 1D line chart $99.523 DXY has touched this price and pulled back and my 702 fib is $99.076 so Im optioning weather to take a short trade (paper trade) now or wait to see if it edges higher around $99.523.
My gut telling me the DXY wont just plummet down from the 702 fib straight away like oils pulled back so I should wait but my emotions want to take a trade so I dont miss out lol. What's your perspective, if any?
missedamillion
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@michaeldouglas1915, dxy hit 0.702 on the fib retracement so I’m bearish on the dxy as well as commodities. Oil looks topped and equities likely have another leg in them. Cryptocurrency follows equities, not commodities