Why is the $US $Stock market going higher? In the news, I keep on hearing many reason why the market is going higher. You hear it is because corporate earnings are good. Some people think it is expectations from Trump policies about to come. These are just two things being stated in the news….but there is many other reasons too.
In this article, we want to present another view. The view is a technical view looking at the US Dollar $Currency vs the SP500. We will examine the $Dollar futures vs the E-MIni Sp500 futures
Below is the monthly chart for the $Dollar vs $ES 500. From Dec 2010 to June 2014 the chart is bearish. This indicated that the Sp500 was stronger vs the Dollar. The chart then went through a bullish pull back with the dollar getting strong until January 2016. After January 2016, the bearish trend continued. April 2017, we retested the low and broke it. The dollar continues to get weaker which is making the SP500 stronger.
Below is the weekly time frame. It clearly shows the dollar stronger vs the US SP500 after April.
Let’s look at each individual instrument on weekly time frame April 2017 onward. Below is the weekly chart for Dollar futures. On April 2017, the bullish trend was officially over and price went through a major pull back. The major pull back eventually reversed into a bearish trend once it broke the cloud.
Below the weekly chart for the $ES E-Mini SP500 chart. Notice, price was going through a minor pull buck before April 2017. After that date, price continued the bullish trend.
Looking at the charts, it is clear that the dollar is affecting the markets.
So why are we discussing this? Well, the dollar going down led to the US stock markets going down. Maybe, it will be an indicator on when the markets will go through a pull back. There is no guarantee but is worth looking for a bottom of the US Dollar futures to see if it leads to the US stock market pulling back.
Below is the weekly support for the next major support for Dollar Futures
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