King Dollar Creates Bearish Wick at 8-year Resistance!

By Chris Kimble of Kimble Charting Solutions
June 3, 2013

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From a monthly basis, the U.S. Dollar created another large bearish wick along an 8-year resistance line at (1) in the chart below. This might surprise a few investors as the Dollar is a popular investment choice right now, with 77% of investors bullish the US$. The combo of the wick at resistance and 77% bulls increases the odds that the US$ remains soft for a while (see my Soft US$ post here).

On the flip side, the Yen is down 20% over the past year, driving it down to its Fibonacci 38% retracement level, and sentiment is very low at 22% bulls. The US$ and the S&P 500 have been correlated over the past two years (not the traditional love/hate relationship), while the S&P 500 has been non-correlated to the Yen.

 

 

Should the US$ continue soft and the Yen rally, look for the S&P 500 to follow the action of the US$! A soft dollar could benefit Gold, Silver and put a smile on the Miners' faces! (See what they're smiling about here.)

Premium Members are owners EWV (2x short the Nikkei) for over a week now. EWV is up over 22% in 8 days thru last Friday. See why members are short the Nikkei in this you tube video interview with Phil Pearlman, executive editor of StockTwits (see interview here).



For information about Kimble Charting Solutions, send an email to services@kimblechartingsolutions.com.

 

 

 

 

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