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March 10, 2020
Marco: SPY, Spreads, Dollar
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Well, if you didn’t listen to the audio file from this morning, I’m sorry. I wish you had, particularly starting around the 5-minute mark. If you did listen, then you know what I am talking about.
That was pretty much a perfect textbook day. I couldn’t have drawn it out any better. If today wasn’t the bottom, then we have much bigger problems on our hands.
The big gap open, the big sell-off, retesting yesterday’s lows, the hold and that late end of day surge. Wow. Perfect. Even better, we took out resistance at 2,855 after failing two times earlier in the day to close at the day’s high at 2,882.
Now 2,855 once again become support, and even better, we have another significant support level down around 2,735.
I think this means that we ultimately look to fill that gap up to 2,986. I am just putting a caution zone in at 2,900, in case.
Looking for Confirmation
So how do we confirm today’s rally as an official turnaround Tuesday, bottom in, day? Well, that is pretty easy gap lower tomorrow fall to around 2,855, and the rest of the day fill the gap up and push above today’s close. It wouuld reverses the current trend, which has been gap higher and trade lower all day.
The good news the RSI is starting to trend higher too.
And, like I have been saying, the equity market is merely following the spreads on bonds, and those rose sharply today too. The USDE10YR is on the cusp of breaking the downtrend, and that is a big deal. It could mean that 10-year rises back to over 1%.
Dollar Index (DXY)
The dollar index had a great day, too, also rising sharply. Notice any patterns.
Anyway, I’m tired, and I’m taking the rest of the day off. I think I deserve this one.
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