Market Update: Dollar Index and S&P forecast
Market Update: Dollar Index and S&P 500 forecast
This week I'll show you the S&P forecast and I think here it is a great opportunity for the next weeks to make some money. Last week I pointed out how EurUsd could be ready for a bearish rally but this did not happen mainly because of the weakness of the dollar. Thursday I closed the position with a small loss and I want to recover next in a way that I'm about to show you.
The dollar index, (in which the euro has a weight of 57.6%) is located on a very important support (year). It lies at a crossroads: - bounce in the support; - breack out and accelerate downward. The support of Dollar Index probably will coincides with the retest of the trendline. If next week the market will go up there I'll sell a small position with tight stop so high risk reward.
STOCK MARKET - S&P FORECAST
Where I see more interesting opportunities than those of the Euro Dollar it is in the stock market. Here the US S&P500 index. As you can see from October 2014, about 1 year and a half is swinging between the extremes of this blue horizontal band. As you're about to see, now at 2,060 points, in the HIGH band. A return to the LOW zone to 1800 points is a -12%. The price Friday has punctured the 21 exponential average that served as support to the price closed below. Note what happened after he broke it in March. This S&P forecast can be achieved in a week or in two-three weeks if, after a first descent, the S&P will retract to do double top. A very nice clue supporting the hypothesis of a decline comes on the distance between the maximum: - from maximum of 20 May 2015 to the 03 November 2015 the distance is exactly 120 days; - 03 November 2015 + 120 days = 20 April 2016, the exact day of the recent S&P top. Since Friday we are bearish with stop above the highs and probably we will increase the position next week. Although the chances are in favor, as every time, this S&P forecast can be contradicted by the market. "The market is always right" then protect ourselves with the stop loss. Good trading, Andrea