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Stocks Plunge Following Massive Dollar Breakout

By Michael KramerStock MarketsJun 29, 2022 03:38AM ET
www.investing.com/analysis/stocks-plunge-following-massive-dollar-breakout-200626432
Stocks Plunge Following Massive Dollar Breakout
By Michael Kramer   |  Jun 29, 2022 03:38AM ET
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The S&P 500 fell by 2% yesterday. I was on to something on Monday when I thought things didn’t seem right. The market popped at the opening but collapsed throughout the morning, dropping 3.1% Intraday from the peak. Maybe the weak economic data at 10 AM contributed to the decline; I can’t be sure. But the dollar index was very strong yesterday and appears to have broken out of its recent slumber.

The move higher in the dollar certainly did not come because of the weaker expected consumer sentiment reading. The rally started yesterday morning on euro weakness. It looks like a cup-and-handle technical pattern in the dollar is trying to play out and could send it to around 106.

USD Index, Daily Chart
USD Index, Daily Chart

S&P 500

Finding the pattern in the dollar made me realize there was probably a good chance there was one in the SPY. Of course, the pattern was there, with an inverted cup and handle. The handle broke today. For now, the first level of support for the S&P 500 would come at 3,800 and then down around 3,675.

S&P 500 Index, 1-Hr Chart
S&P 500 Index, 1-Hr Chart

Apple

Apple (NASDAQ:AAPL) got to the trendline on Monday and failed at it yesterday. Apple needs to hold above $130, which is a significant level. The market will likely make a new low if Apple makes a new low.

Apple Inc, Daily Chart
Apple Inc, Daily Chart

AMD

Advanced Micro Devices (NASDAQ:AMD) looks very weak at the moment, with the odds of $73.50 coming into play increasing. With a gap still open, $61 may even be possible.

AMD Daily Chart
AMD Daily Chart

That’s all for today.

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Stocks Plunge Following Massive Dollar Breakout
 

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Stocks Plunge Following Massive Dollar Breakout

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Comments (4)
Mr Doodl
Mr Doodl Jun 29, 2022 4:14PM ET
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These are really good chart analyses up here.
Ahmad Khalid Noorzai
Ahmad Khalid Noorzai Jun 29, 2022 7:05AM ET
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Plz try sharing ur thoughts about Nasdaq and Dow as well 🙏
Ethan Strong
Ethan Strong Jun 29, 2022 5:52AM ET
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Nice charting. I didnt see the inverted c/h but i started to position for the next leg lower. You and Tim Knight are the only two that actual give good insights during this bear market
jason xx
jason xx Jun 29, 2022 5:11AM ET
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Enjoy it while you can. When the bear market ends you are going back to calling the top everyday through 4 years of gains.
Samer Diab
Samer Diab Jun 29, 2022 5:11AM ET
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all his articles have always been bearish lol
Ethan Strong
Ethan Strong Jun 29, 2022 5:11AM ET
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The bear market ends when the Fed starts QE and lowering interest rates again
 
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