As we expected American Dollar rallied last week. The price forms Wyckoff accumulation on a daily chart. It makes sense to look for new entries when the short-term oscillator gets oversold. I got so many questions last week about DXY and most of them were like – ‘Why do you expect a rally if US data is so weak?’. Well, the dollar is not just a currency, it is a safe haven. Besides, it is undervalued, unlike gold. We still have a lot of risks related to coronavirus and its impact on the economy. It can trigger a significant rally in DX. Besides, there is a strong setup in this market:

The weekly pinch-paunch indicator is 58 (a sign of trend change)

The valuation model – undervalued

COT – bullish

Intermarket forecast – bullish

Seasonal – bottom at the beginning of October

With that in mind, we want to look for and take buy signals using any trading entries.

Dollar, SP500, and Sugar analysis for September 14 - 18, 2020

Advance Decline Line has been one of the best indicators recently for SP500 traders. And again we have to watch it. I think we can see a very short-term rally (if the 4h trendline breaks up). If SP500 rallies without a similar move in the Advance Decline Line, it will set up a short entry. It seems to be a very possible scenario based on other studies:

Cycles – top between 17 – 24 of September, followed by a decline till the middle of October

Seasonal – down from September 17th

Intermarket forecast – down till October

I continue to trade SP500 intraday on managed accounts.

I want to return to Sugar. This market doesn’t have a strong setup. However, there is a chance for a short-term trade. The seasonal tendency is to the upside. Besides, we have a divergence in the 4h chart. So, breaking above the trendline can bring us some profits.

Wishing you a great week!

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