Here’s some analysis on the US Dollar via the US Dollar Index ($DXY). There has been a two week rally in part to relative weakness of other currencies and the slow pace of Fed interest rate policies. The rally came just as the weekly DXY recorded a 9 count TD Buy Setup. Overall, the DXY is expected to stay range bound, and this will be the conclusion if the weekly DXY can close above the 97.064 TDST Resistance. However, if the rally continues with a monthly close (May 31, 2016) above 99.531, that will signal a new upside trend is beginning. Outside those scenarios, a selloff below the recent low at 91.919 will reinforce TD Buy Countdown will take place, and the correction should gain momentum.
Note: This will be the last post as I will take a two month break. Knowing that a lot can happen between that time, I updated the Long Term Outlook.
S&P 500 (SPX) SHORT TERM OUTLOOK: BEARISH
Neutral if SPX closes above 2059.92 at the close.
S&P 500 (SPX) SHORT/INTERMEDIATE TERM OUTLOOK: BEARISH
Neutral if SPX closes above 2084.39.
Using traditional tools, the SPX closed below the 50 day moving average. This makes the 2112.02 TD Trend Factor more relevant as a top. To officially qualify the viability of the TD Trend Factor, the SPX needs to trade 5.556% lower off the 2111.05 high, placing a soft target at 1993.76.
S&P 500 (SPX) INTERMEDIATE/LONG TERM OUTLOOK: BEARISH
Neutral if weekly SPX closes above 2091.58 on Friday, May 20, 2016
S&P 500 (SPX) LONG TERM OUTLOOK: NEUTRAL
Bullish if monthly SPX closes above 2107.29 or Bearish if monthly SPX closes below 1940.24 on Tuesday, May 31, 2016
With Fed policy indecision and an outrageous presidential race, the long term S&P 500 (SPX) is expected to stay bounded between 1850 and 2100. Trading outside those levels should accelerate gains or losses, as the monthly SPX TTM_Squeeze has been coiling for months.