It is all about the Bucky!

In a post 10 days back, I said the US dollar should get support at the 200 DMA. USD went below the 200 DMA only to reverse back above both the 200 DMA and 50 DMA within 2 days. Will USD stay above these 2 supports? You could use these support/ resistances as a reference to enter the market long or short. USD is inversely correlated to the market, keep that in mind.

I am posting the USD chart in the same format as in 2 weeks back. I see further weakness in USD in near future although USD seems to be firming a bit too much in just 2 days. But, having seen this market move 150 SPX points roundtrip in 5 sessions, I urge you to be cautious if you are long or short. Be nimble, and take small positions unless you are super confident. This market is certainly not for the faint hearted!

USD chart as of close yesterday. Stockcharts updates at the end of day. But, as of today morning, USD is at 77.33 in real time which is way above the 50 DMA as shown in the chart. It would be interesting to see if these supports hold.

p.s: Recently, I started tweeting. My twitter page is this. 

US Dollar Index

The US Dollar index is definitely in a bearish trend. For now, the 50 DMA provides support. US Dollar index is a risk off trade, and is inversely correlated to the US stock market. I expect the 50 DMA to break next week and the 200 DMA should give good support. Will 200 DMA hold? The MACD is turning down which indicates the continuation of the trend down. The histogram also ticked one down than the day before. For the MACD to turn up again (to turn this chart to bullish), it will take atleast few days time. Meanwhile, the candles should bounce on the 200 DMA. There is also the previous breakout support at ~ 75. If the 200 DMA doesn't hold and the MACD continues downward, then it is ultrabearish for the Dollar index and uberbullish for the market. You can also note that Eur/USD is just pips away from the upside resistance. Both these currencies can play pingpong in a small range for the next few days, and markets will definitely take it as positive. 

US Dollar index

   

According to my signals, USD is bearish which bodes well for the US market indices. Market discipline is absolutely important than these correlations though. If SPX closes below 1175, that is bearish, close long positions and get short.