Chop, or Drop and Pop or Drop and Drop. Futures are down -7.50 on ES right now but more importantly the dollar is above 77 and up .76% at the same time /CL(oil) is down 3.59% hovering around 69.80.
For the past week, it has been mentioned here to watch oil and the dollar closely since they will signal an end to the rally. This chart has been posted several times.
Here is the live chart.
Oil will be nearing support right now around 69 which is key support of its current uptrend. Here is the 69 level on a PnF chart and a candle chart.
That 69 level will be very critical since it has provided a bounce at that level each time.
The dollar is up big A.M but will be nearing resistance soon at 77.75. If the dollar can break this level, it would spark a big rally in the U.S Peso.
On the 60 min SPX, it has broken its parabolic death to the all bears trendline and the indicators are sitting neutral.
The open may bring SPX into oversold areas on these indicators so SPX might drop then pop. The past few times the market has dropped it has dropped then chopped then exploding higher.
SPX should be opening near 1060 which may provide a bounce point but 1050 is stronger support. 1030 is a huge area to watch but I highly doubt SPX gets there today.
The market is looking to open down this morning, if the dollar keeps rising and oil keeps failing throughout the day expect some more downward pressure. But since oil is dropping to support and the dollar is nearing resistance these sectors could reverse throughout the day. Watch for a drop and a pop up, this could be a great dip buying opportunity or a bear trap. If you want to be a bear wait for support to break. But focus on the dollar and oil as your clues for the where the market may be heading.
