November 14, 2019
By Mish Schneider
On the dollar, I would reverse the bias of a top should DXY first clear 98.45, but even more so if DXY takes out 99.40 or recent highs.
If the dollar has topped out, it means several things for the market.
First off, it means that the cost of some goods is cheaper, which is better for American exports.
On the other hand, a cheaper dollar means the currency buys less, especially for commodities and goods produced overseas.
Would that spark more inflationary conversation? Possibly yes.
As the dollar does not trade in a vacuum, we have to watch the yields, the next moves of the Fed and the overall economic indicators.
Furthermore, we will see signs from the metals (they will rise in price), and that odd barometer-sugar futures, which continues to base out.
The trickle effect to the market should the dollar drop precipitously is negative. Folks will get scared.
The biggest issue looming, considering the rising debt, is that the dollar loses its place as the worlds’ reserve currency.
That is the worst-case scenario.
Technically, the support levels for now are at 97.20. Should that level fail, we are looking at 96.20.
Either way, the fall is significant enough to bring buyers into commodities and sellers into equities.
Russell 2000 (IWM) 155-156 Key support 158 pivotal 160.46 resistance.
Dow (DIA) Made a new all-time high at 278.40. Inside day today. 276.25 now nearest support
Nasdaq (QQQ) All-time highs at 202.21. 200.20 support.
KRE (Regional Banks) 55.55 pivotal support 57.52 next resistance
SMH (Semiconductors) 134.28 all-time high. Breakaway gap intact if holds 130
IYT (Transportation) 195 pivotal 194 some support and must clear 200.42
IBB (Biotechnology) 108.75 nearest support
XRT (Retail) 43.92 now the pivotal support. 44.30 pivotal. 45.68 resistance
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