FINANCIAL ICEBERG
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 TECHNICALS
US Dollar Index/SP500: A Risky Mix?
 January 18 2017 ​( From TradingView , CNN, FRED)
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The Situation

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​​​​In these range trading times (good to know that​​ the 
​Fear and Greed Index ​from CNN Money is coming from the 
Extreme ​Greed Zone a month ago to the ​Greed Level now at 57). 
​It is ​interesting to look the behavior ​of the US Dollar Index ​​
​(USD-DXY) ​and the SP500 Index.

The US Dollar Index broke on October 10 2016 the Major Resistance
that started back since December 2 2015​. (See first chart below - Top Blue Trendline) .From October 10 2016 til January 5 2017, we were evolving into a Steep Daily  Rising Wedge​ (Red Trendlines). Since then, we are into a bleeding mode. We did test on January 17 2017 the Major Trendline (Previous Major Daily Breakout Trendline) that started back since March 12 2015!  (See first chart below - Yellow Trendline) Few of us realize the the US Dollar Index reached at the beginning of this year a level last seen in December 2002!
​
For the SP500 index, it started a Bullish Trend from the post-election on November 8 2016 and peaked on December 13 2016 to consolidate thereafter. ​ 

​​​​​​As shown by the second chart below, the economic impact of a strong US Dollar on US exports on a macro scale is quite direct. A strong US Dollar is having a negative effect on the US exports, so already the Trump Team inheriting a bad level in the Trade Weighted US Dollar Index. ​(See second chart below - Red Line)
​Another consequence of a strong US Dollar is to bring inflation pressure down...
​​
But very few of us realize that for a foreigner looking at the SP500 Index on a Macro Basis (so in US Dollar Index - DXY times the SP500 Index) we did finally reach on December 20 2016 a new high ever (prior highest ever was October 25 2016) and into a daily falling channel since. As domestic investors main stock index ETF (SPY ETF) still trade +1.8% above the 50 DMA (Day Moving Average), foreigners are already testing that zone (SP500 times DXY Index)...   ​(See Third Chart Below - Red Line - Ellipse)

Foreigners will dictate the trend for the SP500 in the next few trading sessions...

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US Dollar Index/SP500: A Risky Mix? $SPY, $SPX,  USDX  #Trading #dxy  #usdollar #SP500
#spy 





​US Real Exports of Goods and Services
(Year over Year in % - Left Scale)​
​
​US Trade Weighted Dollar Index 
​ (Inverted - Right Scale)​
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Financialiceberg.com


US Dollar Index - DXY 
times
​​SP500 Index 
​(Daily Candles)
​


US Dollar Index - DXY 
​(Daily Candles)
​


Financialiceberg.com