DXY to fall bullishly (W bottom Dollar Milk Shake scenario)

2022年8月9日

Falling wedges are generally very bullish structures that have targets at the hight of the wedge. If a falling wedge is on a flagpole then the target of the wedge is going to be a flagpole extension.

But price often don't go straight up. Having price action retest lows is very normal. Having price action retest a trendline that was resistance and turn it into support is very normal as well. If DXY does either one of those it can form the the W pattern I think can form from this set up.

This chart is rather zoomed out to show 40 years of data. The RSI is clearly got some bearish divergence and has come ouf of the orange macro wedge into a micro black rising wedge. If price came out in a channel rather than a wedge, I would be a bit less bearish on DXY.

I don't want to get too far ahead of myself when it comes to forecasting too far out but calling for a retrace seems to be a very safe call. That retrace falling to the gray box or the wedge resistance is also very safe. Calling for the RSI to chop its way downward to below 30 also seems a very safe call.

My linked ideas show some very bold calls on DXY that were contrary to the broader market. I was one of the first people to publicly draw dxy in a falling wedge on the log chart. Please see the linked ideas for several of those ideas.

I was also one of the first to publicly chart the falling wedge on bitcoin on the standard scale

I was one of the first to publicly call for a inverted head and shoulders on ETHBTC

The point off all that? I have a pretty good eye for seeing how different scenarios can play themselves out. When I started with Tradingview I didn't have the emotional discipline to trade properly them and that is still coming along. The DXY Dollar milkshake W scenario would cause the most pain to the most people who are not zoomed out and able to catch this transformation. I can't get caught out like that.

And of course, I have been disastrously wrong before. Especially in cryto. But DXY moves much slower than crypto so there is more time to plan, zoom in and zoom out. I have tagged this neutral because I don't see a direct dxy trade I would want to do now. Indirectly I think the equities and crypto will go crazy for a couple of years and I want to benefit from a dxy reversal

2022年8月10日

ノート

CPI just came out, numbers don't matter. What does matter is that, so far, DXY has had one of the biggest red days in over a year. It can still be bought up but I am not sure that it will. On the daily it slipped the 50 and soon the 50 and 20 will cross bearishly. I don't think DXY will trade above 106 for a long time.