9/23 UPDATED BEAR THESIS $316-317 next stop
Updated
Key points
- The DXY may bounce on resistance as shown
- Oil may bounce on support as shown
- Bonds remain unchanged as shown
- Need to gauge Asia's reaction from our sell off today for confirmation on tomorrows trade
- For those that don't understand intermarket relationships. From left to right and can start at any point.
Currency ------> commodities -----------> bonds -----------> Equity -------> currency --------> commodities ---------> bonds -----------> equity. - Huge markets reacting to one another, all interconnected, all correlated globally.
- Given the circumstances, Spy is sitting in no-mans land right now with a straight shot to 316-317, but given that the DXY and OIL is looking to bounce off support/resistance means its bullish for SPY(meaning a relief bounce is probable, but will only be able to tell at tomorrows open, we need to see how asian markets will react to our sell off today)
- The Dollar had a textbook breakout to the upside. When the Dollar rises, equity falls.(not all the time). When Oil loses value ----> spy loses value)
- My chart merely shows that OIL is near a support line and that Dollar is near a resistance = Probability of Spy having a relief bounce.
- The Risk vs reward is still heavily favored to the bears.
Note
relief bounce playing out nicely from yesterdays call.
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