Case Study: USD Index
USD Index made a big bullish breakout move in 2014
Source: Chartalert.com
No Bull market ends abruptly or because it has run up too much. As per Science of Stock Price Action – the asset after a big move trades sideways. That’s precisely what happened with Dollar index in 2015 and 2016. This is how USD index formed a chart over following 15 months
Source: Chartalert.com
The sideways action was still a Bullish pattern. This is what I tweeted when USD index was down and out at the lower end of the range in early May. Yes that was the time when it was true test of conviction
It's time to turn Bullish on Dollar…
Dollar Index at 92
It will be interesting to watch where it closes today— Deepak Singh (@smarket) May 3, 2016
Just see how USD index rallied from that base
Source: Chartalert.com
What does this all mean?
When an asset is in Bull market, pay attention only to price action and have firm conviction even when things are down and out as long as the stock is doing the right thing. Never listen to opinions because big money was giving bearish when you should have been buying
Big money is not smart money. This is PIMCO becoming bearish on dollar index at 92https://t.co/HGb2skWWkQ
— Deepak Singh (@smarket) May 24, 2016
Nobody knows “even Big and Smart money” what will happen in the future. As a technical watcher – trust the trend. This is tweet on May 03 when dollar index was at consolidation lows
It's time to turn Bullish on Dollar…
Dollar Index at 92
It will be interesting to watch where it closes today— Deepak Singh (@smarket) May 3, 2016
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers