SP500 broke to the new highs. Volume is still very low and the Advance Decline Line doesn’t support this rise too. It is bearish. However, there is still a lot of momentum in this market. Likely we will see choppy trading with upside bias till the middle of September followed by decline. We are getting close to elections. With that in mind, I believe that pullback (if any) will be bought very fast. Besides, the Fed Funds forecast signals a rally coming at the end of September. The best thing we can do now is intraday trading. There is a chance for a swing trade, but only in a month from now. I plan to follow this strategy on managed accounts.

I got so many messages about the American dollar. So, let’s have a look at the charts. We discussed the bullish fundamental setup, but there is still no entry. There is a clear trendline on a daily chart. Breaking above is an entry. The most conservative traders can wait till DXY breaks and hold above 7 days high. It has been a long time since the dollar did that. So, breaking and holding above is sign bulls have got the strength to reverse a trend. The most aggressive traders can enter once and if higher low will be formed before breaking the trendline. But this trade is too risky for me. This market has a good fundamental setup and you can use any entry technique to pick up a trade.

SP500, DXY and Sugar analysis for 31 August - 04 September 2020

Our bearish setup in Sugar is played very well. However, I think it makes sense to take profits at 12.20. This range previously acted as resistance and should be tested again. There is a big chance we will see a strong bounce from this level. 

Wishing you a great week!

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