In my view, USDOLLAR has broken out and is headed to 12130/60 (the next decision point). IF price pulls back (not or later), then the parallel that has been support/resistance since June 2020 (magenta line) is proposed support along with the 50 day average at 11940. That could happen on Wednesday with FOMC, at a later date, or not at all! Bottom line, 11940 is proposed support and I’m looking towards 12130/60.
Copper broke today and the first level of interest on the downside is the 23.6% retrace of the rally from March 2020 at 4.20. This level coincides with resistance from this March. Former support at 4.4440 (also the 50 day average) is now proposed resistance.
USDOLLAR (quarter each of EUR, GBP, JPY, and AUD) has broken above the trendline that originates at the 11/12 high. The top side of that line is now proposed support near 11684. Upside focus is the 12/21 high at 11837. The level is reinforced by the median line from the fork that originates at the January 2017 high. A longer term chart is shown below for context.
Right on cue. Bitcoin plunged last week before bouncing back. This is the 2nd weekly volume reversal in the last 3 years. The other one was in June 2019. Watch for resistance from daily reversal resistance at 18732
There is a massive parallel in the Dow at about 30900 that is worth noting. The line crosses the 2007 and 2018 highs and high from early this year. The line equidistant from the median line (concept symmetry) was support in March. These parallels are based on the line that connects the 1932 and 1982 lows (see monthly chart below).
Neither SPX or the Nasdaq have broken above their reversal day highs from last week (11/9). What’s more, SPX has reversed yet again from the line that connects highs since 2018. Don’t forget that this line crosses major pivots for the last 88 years (monthly chart is below). U.S. equity valuation is at a peak as well (see 2 charts down).
Another month is in the books and SPX continues to trade ‘heavily’ under the its ‘meridian line’. An inside month formed in October. Recall that September was an outside bearish month (see the close up view below). Of note is XHB (homebuilders), which made a monthly volume reversal in October (see below). Is this one of the last segments of the market to put in a top?
The top 3 month EidoSearch is the 3 months leading up to the 1987 crash. This is not a prediction, simply an observation. Getting back to reality, 3428/55 is an important short term zone. The top of this zone is channel support. Weakness below would warrant a bearish position…then see what happens.
SPY and SPX (looking at SPX today to show more price history) traded through the line off of the January 2018 and February 2020 highs today. Let’s see where we finish the week though. Extending the line back in time reveals a lot of important pivots around or right at the line…I call this an ‘angle influence’. The monthly chart below shows that the line tags the 1932 and 1942 lows as well! Finally, I’ve shared several charts of tech names that made bearish volume reversals today (tech has been the high flyer).