Several fundamental analysts have suggested that lower USD prices are in the cards. That argument can certainly be backed up with the technical evidence on the Daily chart. The counter trend rally from the April 21st low at 97.92 reached its terminus at 102 on May 12th. This led me to draw a longer-term Standard Pitchfork (gold P1 through P3). The Upper Parallel (solid gold line) of that Pitchfork continued to cap any move higher and that was the genesis of shorter-term Schiff Modified Pitchfork (violet P1 through P3). On Tuesday the Lower Parallel (solid violet line) was violated, giving credence to my technical thesis that the counter trend rally had reached a short-term top. That was further confirmed when prices fell below support at both the Kijun Plot (solid green line) and the Lower Warning Line (violet dashed line) of the Schiff Modified Pitchfork today. The shorter-term Stochastic Momentum Index rolled over through its signal line and it is accelerating lower. MACD failed to enter positive territory and is turning lower. If prices fall below the violet P3 low at the 99.15 level, the 97.95 level in the USD Index will likely be challenged.
For readers who are unfamiliar with the technical terms or tools referred to in the comments on the technical condition of the SPX can avail themselves of a brief tutorial titled, Tools of Technical Analysis and an in-depth comprehensive lesson on Pitchforks is available on my website…
www.themarketscompass.com
Charts are courtesy of Optuma
To receive a 30-day trial of Optuma charting software go to…
www.optuma.com/TMC
