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SPX, US Dollar, Dow Jones Industrials: Markets Approaching a Key Inflection Point


The outlook has been anticipating higher prices since November 29, but now things get interesting again.

This is the daily chart, which takes a broad-based look -- but the hourly suggests the dollar may make another short-term run higher (toward red 2) before selling off again.

Click to enlarge

In conclusion, fortunately my intermediate interpretation of the past couple weeks has now been proven correct, as both the bullish and bearish intermediate counts have been pointing to higher prices -- but the market's now reaching an intermediate inflection point. There are two ways we could see a correction (or worse) develop soon (the abc bear count, and the leading diagonal bull count) -- however, the possibility of a third wave that simply marches relentlessly higher should keep bears on their toes. Thus, the bottom line message for traders (on either side) right now is "stay nimble."

Speaking personally, I'm still positioned net long from mid-November, but I'm now keeping those positions on a very tight leash. I approach inflection points such as this one on auto-pilot, so to speak. Take the emotion out of it -- know the important price levels and set clear stops for your trades. If the trade goes against you, or if the market dictates that it's time to take profits, then get out and live to fight another day. Trade safe.

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No positions in stocks mentioned.
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