Yahoo Finance Americans did that again!
Americans did that again – V shape reversal after a heavy drop. Many traders get used to it but many are still surprised. The style that they are doing this is impressive and most probably scares off the potential sellers, which is an additional bullish factor here. First, let me show you the Nasdaq, which defended the round 7000 points support (green) and went higher. Another day, another dollar one could say. That reversal cancels any sell signal. Bears can come back to thinking about opening short positions only after the breakout of the green line, which currently is less likely to happen.
Another one is the SP500, which for the past few days was drawing a pennant formation. Pennant resulted with a breakout to the upside. The up trendline was defended and the horizontal resistance on the 2790 points (orange) was broken. That is a signal to go long.
The last instrument here is the DXY, which is back on the right path after defending the 50% Fibonacci with the triple bottom formation. Actually, at the same time, this is a denied descending triangle pattern. It does not matter though as both of those formations, give us a buy signal, especially after the breakout of those two blue dynamic resistances.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis
This article was originally posted on FX Empire
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