US analysis: Where dollar and Dow Jones are heading
16th July 2018 14:05
by Alistair Strang from Trends and Targets
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As US President Donald Trump bids farewell to Europe after an eventful week-long tour, chartist Alistair Strang assesses the strength of both the dollar and America's top index.
The US President's visit to the home country (or in the case of Trends & Targets, the home county as his Mum's cottage is just a ferry trip away!) placed us in the position of being US biased in recent commentary.
It's quite curious how, despite a plethora of negative mass media coverage, the US markets continue to perform strongly.
One pretty important example of this strength is GBP:USD as sterling remains weak against the dollar. The immediate situation is pretty dire, as weakness now below 1.31018 suggests travel to an initial 1.30820.
Realistically, we expect this level to break, opening the door for continued travel down to 1.26595.
As for the Dow Jones, at time of writing it's trading around the 25,000 point and regarded as being on a growth cycle to an initial 25,540 points.
Our secondary, if such a level is bettered, calculates at 26,275 points and rather effectively matches the Dow highs of January this year.
Common sense alone suggests caution around such a point, due to the visual implication of a "double top". For the Dow Jones to spoil optimism, it requires break below 24,125 points - the red line on the chart.
One small word of caution relates to the downtrend since January. It implies the 'long' potentials, while arithmetically correct, are liable not to trigger until the US index actually makes it above 'blue' on the chart, presently around 25,100 points.
Past performance is not a guide to future performance
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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