Too Many Dollar Bears?
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Public opinion towards the U.S. Dollar has grown to be rather Negative/Bearish of late at (1). At the same time the Dollar-Euro ratio is moving a little higher off of support and moving to the upside this morning, breaking above a multi-month flag/pennant pattern at (2). At the same time the S&P 500 finds itself on a steep support line.
No doubt over the past few months, a rally in the Dollar has had little negative impact on the stock market. Would a further rally in the Dollar-Euro contract cause the 500 index to break below its rising support line? Will it be different this time? No doubt positive momentum remains in the stock market.
With sentiment towards the Dollar at these levels, when it comes to portfolio construction and being long risk assets, protecting values at this support line looks to be a good idea.
(c) Kimble Charting Solutions blog.kimblechartingsolutions.com
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