Over the course of the last year the Dow looks to be making a double top. The Dow's most recent high is a little bit higher than the Dow's top of January of 2004. This is good. It would be a final shake out of the weak shorts. In an inverse or opposite manner, it is like the lower right hand bottom of a double bottom that makes for a final shake out of the weak longs. The double top can be seen in this 2 year chart:
A two year chart of the Dow
Also interesting or tending to be confirming of the longer Dow chart picture/pattern is the shape of the right hand high of the Dow's double top. It is about a month and a half long head and shoulder topping pattern. Yesterday, Thursday (January 20), the Dow broke below the neckline of the head and shoulder pattern confirming this 1 and 1/2 month long pattern, which can be seen here in this 6 month Dow chart:
A 6 month chart of the Dow
Also interesting or tending to be confirming of the longer **bearish** Dow chart picture/pattern is the shape of the XAU and HUI gold and silver stock indexes. These should move roughly inversely or opposite to the DOW or other regular stock indexes for fundamental reasons. In their own way they are probably forming opposite **bullish** patterns, upside down head and shoulder patterns. Currently, they are probably forming the low of a right hand shoulder. Time will tell. These 2 indexes and their possible patterns can be seen here in these 2 year charts.
The XAU chart
The HUI chart
And, the longer term trend lines and the major triangular flag patterns of the gold and silver charts support the bullishness of the XAU and HUI charts. So the gold and silver charts are lending support or tending to confirm the bearishness of the Dow chart.
What all this is saying to me is that the USDX may not make it much above 84.
And since this has been talk about patterns: "Patterning your life around other's opinions is nothing more than slavery." -- Lawana Blackwell
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