The Dow isn’t a great index to follow or to chart, except for the fact that it’s a great “tell” when it comes to the narrative being promoted.
Yesterday, when faced with the option of reversing at the trend line (below, in red) which has touched off four previous downturns, it broke out instead — “telling” us that there is nothing but upside ahead.Note that this breakout follows November’s push above the neckline (dashed white line) — also on the fifth try.
Neither of these would be possible, of course, without the President’s Working Group (Plunge Protection Team) which met on December 23, 2018 and, unfettered by public scrutiny or minutes, unleashed hell on VIX.
Since then, VIX has been hammered at every obvious potential breakout point and many which fell short of obvious resistance.And, USDJPY continues to be very cooperative, rallying whenever needed. Will it matter that it has reached 5-year overhead resistance?As we always do when looking at breakouts, we’ll look at whether this one will hold.
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