The February-March crash was exacerbated by the big pop and rally in the dollar in March. Considering the uber complacency in the stock market verified by the low CPC and CPCE put/calls, it is easy to see the perfect storm about to begin where the dollar pops, and then really pops as the mountain of shorts panic, and the stock market tanks. There are interesting days ahead probably historic days.
The SPX is moving through the channel created by the 20-day MA resistance at 3428 and the 50-day MA support at 3340. The S&P 500 begins the Friday session at 3357 which is 17 points above support and 71 points from resistance. Interestingly, the dollar is also moving through the same channel. Dixie is bound by the 50-day MA resistance at 93.73 and the 20-day MA support at 92.97. The SPX and USD charts tell the tale.
If the dollar continues breaking out higher, with the euro drifting lower, and dixie pops above the 50-day MA at 93.73, it will probably be a moon shot higher and the SPX will collapse through its support at the 50-day. This outcome is consistent with the uber low put/calls that signal a significant top right now. It can easily be February-March redux. The put/call ratios are rising now but there still needs to be panic and fear to signal a tradeable bottom.
If the dollar rolls over, as the euro climbs higher, and falls through that 20-day MA support at 92.97, exactly where it is parked on the chart, that would favor the bullish outcome and the SPX will run up through the 20-day MA resistance and higher. Either way you slice it, the dollar charts are set up, or days away from being set up, for a multi-week rally which will likely tank the stock market.
The inverted head and shoulders (H&S) patterns are highlighted. The blue inverted H&S has a head at 92.10 and neck line at 93.70 so a break above 93.70 would target 95.30 an area of price resistance from July. The purple inverted H&S pattern has a head at 92.10 and neckline at 93.40 so a break above 93.40 would target 94.70 an area of price resistance from July. DXY is currently trading at 92.80 falling below the 20-day MA support favoring bulls. Euro 1.185. S&P futures are up +3. VIX 26.21. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.