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Commodity Trading Discussion Forum

Re: S&P/DX/bill ward *PIC*

Posted By: Trades
Date: Sunday, 5 July 2009, at 2:33 a.m.

In Response To: Re: S&P/Using a 34ema/50ema Cross Over/Maneca (bill ward)

There is no exact correlation with DX and SPX but is more or less inverse. The SPX has support at 880 and a break of that would have next support at 790-800 and spook the hell out of everyone. A break below 790 would suggest a double bottom to the March lows. While too many people expect a correction for it to be likely perhaps far more than a correction to recent support is about to take place and may trap many buying the dips like catching a falling knife. DX broke over the downtrendline for a reason and wasn't a coincidence. While breaking an angled trendline is nothing new for a volatile DX note it wasn't just a one or two day break and a return to the sell off and a redrawing of a new downtrendline but has been 4 weeks above the downtrendline and chopping sideways waiting for something. Notice the very bad employment report Thursday etc didn't hurt it either. And Wednesday's close below 80 had no follow through to the downside either. DX actually rallied on the news. So much for the "below 80" crash and burn scenario so far. While all this is a heads up the key here is to watch for SPX to break or hold 880. And a break above 81.50 on DX would suggest a rally to the main downtrendline and price resistance at 83. A DX break of 78.40 would signal a return to the long and medium term bear market and a strong commodity rally. A break below 80 wouldn't mean much other than a possible swing trade of inverse markets.

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