This is an update on DXY . I published the JACK BE NIMBLE reversal article May 3rd, 2016.
I am long the US Dollar, but I believe that $94.30 has to be convincingly broken to the upside to have a DXY in an upside reversal.
The one hour Ichimoku Cloud readings (above chart) are very positive:
Let's review Don's TRADE-MAP approach:
TRADE = 1. T : Time and space (Fractals); 2. R : Repeating Cycles; 3. A : Advancing Trend; 4. D : Declining Trend; 5. E : Energy in Phase Forces.
.....MAP = 6. M : Momentum and Velocity; 7. A : Analysis of Structure; 8. P : Price Performance.
When I mention "Don's Top Ten Technicals", I use the elements of the "TRADE-MAP" approach: SINCE May 3rd, 2016 IN THE CHART OF DXY:
1. The Ichimoku Cloud has stopped declining and is rising. 2. Prices have EXPLODED above the cloud. 3. Prices are trading above the thick red Ichimoku Cloud Conversion line. 4. The thick red conversion line is also rising. 5. The thick black line is the Ki jun-Sen baseline of the Ichimoku Cloud , which is rising and above the cloud. 6. The indicator on the top of the page is RSI / Stochastic , and this is strong. 7. The top middle indicator is vortex and it is strong (green over red). 8. The Top (bar-type) indicator measures the "phase energy" of DXY, and this is STRONG. 9. The green fractal arrows are up (not shown). 10. Look to the far right on the chart, around $93.888. You will note a yellowish line on top (lips), with black dots below (teeth), and a blue line (jaw) below the black dots. Now, all three are rising, correct? This is where I ask you to use your imagination and envision these three items as the "separated jaws of a feeding alligator". This is a positive indication because the alligator is FEEDING in the uptrend.
With all of these positives, why am I so nervous being long DXY? I call this the "JACK BE NIMBLE" trade because the longer term direction of DXY is still DOWN.
No matter what you trade long on the US Dollar, one strategy is to keep raising a stop loss order each day based on the previous day's trading (slightly under the previous days low). What am I looking for? The answer:
Break of the down-trend is a continued rise above $94.30. I must act as "JACK BE NIMBLE" on this trade, because the US Dollar strength does not make sense to me if the Federal Reserve is not going to tighten any time soon. Also, if DXY is indeed going to remain strong, then I think the S&P-500 will sell off, because 65% of these companies do business overseas, and the strong dollar will hurt them. There is also an INTER MARKET TRADE ASPECT to my position in DXY.
Two days ago I published charts of CAT, which reversed May 3rd after it completed a 5 wave (with a-b-c corrective waves) harmonic pattern. CAT is hurt by a strong US Dollar. Are both DXY (going up) and CAT (going down) reversals coincidence? I don't think so.
Please go to JACK BE NIMBLE, part 4, a longer term view of DXY.
I hope this has been helpful, entertaining, and informative. May all of your trades go well. Don.
I am long the US Dollar, but I believe that $94.30 has to be convincingly broken to the upside to have a DXY in an upside reversal.
The one hour Ichimoku Cloud readings (above chart) are very positive:
Let's review Don's TRADE-MAP approach:
TRADE = 1. T : Time and space (Fractals); 2. R : Repeating Cycles; 3. A : Advancing Trend; 4. D : Declining Trend; 5. E : Energy in Phase Forces.
.....MAP = 6. M : Momentum and Velocity; 7. A : Analysis of Structure; 8. P : Price Performance.
When I mention "Don's Top Ten Technicals", I use the elements of the "TRADE-MAP" approach: SINCE May 3rd, 2016 IN THE CHART OF DXY:
1. The Ichimoku Cloud has stopped declining and is rising. 2. Prices have EXPLODED above the cloud. 3. Prices are trading above the thick red Ichimoku Cloud Conversion line. 4. The thick red conversion line is also rising. 5. The thick black line is the Ki jun-Sen baseline of the Ichimoku Cloud , which is rising and above the cloud. 6. The indicator on the top of the page is RSI / Stochastic , and this is strong. 7. The top middle indicator is vortex and it is strong (green over red). 8. The Top (bar-type) indicator measures the "phase energy" of DXY, and this is STRONG. 9. The green fractal arrows are up (not shown). 10. Look to the far right on the chart, around $93.888. You will note a yellowish line on top (lips), with black dots below (teeth), and a blue line (jaw) below the black dots. Now, all three are rising, correct? This is where I ask you to use your imagination and envision these three items as the "separated jaws of a feeding alligator". This is a positive indication because the alligator is FEEDING in the uptrend.
With all of these positives, why am I so nervous being long DXY? I call this the "JACK BE NIMBLE" trade because the longer term direction of DXY is still DOWN.
No matter what you trade long on the US Dollar, one strategy is to keep raising a stop loss order each day based on the previous day's trading (slightly under the previous days low). What am I looking for? The answer:
Break of the down-trend is a continued rise above $94.30. I must act as "JACK BE NIMBLE" on this trade, because the US Dollar strength does not make sense to me if the Federal Reserve is not going to tighten any time soon. Also, if DXY is indeed going to remain strong, then I think the S&P-500 will sell off, because 65% of these companies do business overseas, and the strong dollar will hurt them. There is also an INTER MARKET TRADE ASPECT to my position in DXY.
Two days ago I published charts of CAT, which reversed May 3rd after it completed a 5 wave (with a-b-c corrective waves) harmonic pattern. CAT is hurt by a strong US Dollar. Are both DXY (going up) and CAT (going down) reversals coincidence? I don't think so.
Please go to JACK BE NIMBLE, part 4, a longer term view of DXY.
I hope this has been helpful, entertaining, and informative. May all of your trades go well. Don.