M for murder aka double top reversal
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M for Murder, also known as the double top reversal pattern, has the SP500 or ETF SPY at a major decision point. Could Powell change gears today and stop the FOMO rally, or will he help SPY break resistance and potentially undermine DXY? Nobody knows, but today we might see it.
On the daily chart, SPY is overbought and is due for a reversal. RSI and MACD are signaling a sell, and SPY is forming a significant double top reversal pattern, or "M for murder."
On the other hand, DXY is breaking above the big red or 200-day MA (chart below)and could become extremely bullish if it closes today above it or 103.6. On Wednesday, it broke out from a falling wedge, suggesting a potential significant bull run in DXY.
On the weekly chart (chart below), SPY shows significant bearish divergences, indicating a potential sharp drop. However, there is an opposite scenario for both SPY and DXY. If SPY continues to form a high base at this resistance with lower volume simultaneously, there is a possibility it will break the July high and march towards an all-time high, while DXY may not find the strength to break its resistance and could fall.
Regardless, today could be the day that reveals the direction for the next few weeks and months. Personally, I am on the bear side. Powell doesn't necessarily need a strong market to fight inflation; a strong dollar, weak oil, and a weak market might be more beneficial!
On the daily chart, SPY is overbought and is due for a reversal. RSI and MACD are signaling a sell, and SPY is forming a significant double top reversal pattern, or "M for murder."
On the other hand, DXY is breaking above the big red or 200-day MA (chart below)and could become extremely bullish if it closes today above it or 103.6. On Wednesday, it broke out from a falling wedge, suggesting a potential significant bull run in DXY.
On the weekly chart (chart below), SPY shows significant bearish divergences, indicating a potential sharp drop. However, there is an opposite scenario for both SPY and DXY. If SPY continues to form a high base at this resistance with lower volume simultaneously, there is a possibility it will break the July high and march towards an all-time high, while DXY may not find the strength to break its resistance and could fall.
Regardless, today could be the day that reveals the direction for the next few weeks and months. Personally, I am on the bear side. Powell doesn't necessarily need a strong market to fight inflation; a strong dollar, weak oil, and a weak market might be more beneficial!
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Also on weekly volume is dropping hard while the market is pumping, very bearish!
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If close above big red, there is a huge posibility for DXY to pump to 106
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DXY on weekly huge hammer reversal pattern which also indicates new bull on dollar is here and bear for SPY
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SPY is confirming we are going down hard, and it is confirming with one of the most important reversal candlestick patterns, a bearish engulfing candlestick.
We got it at a double top, so it represents even more power towards the bear. Furthermore, MACD has turned down, and lines did cross, confirming all said.
However, SPY is high-basing, and if it somehow manages to find strength and volume and break this resistance with a huge volume, it would indicate more upside will be there. But it has to happen today or tomorrow, and until then, it HAS to stay up on small volume.
There is an 80% chance for a strong drop ahead.
Consistency is the key of success....
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