Weekly Charts – USD, DJIA, SET

Latest thoughts from chartist Ploy! She’s looking closely @ the Dollar Index and the impact on the markets globally.

Apologies for my last week’s forecast that the US dollar index would fall until late December.

The US dollar index bounced back and made a significant breakout above the given barrier at 79.70-79.84. It may head up toward the key barrier at 81.28-81.30. This is the pressure that is pushing the world equity markets and gold price down. I now cancel my last week’s prediction that the US dollar index may fall until late December.

Given the pressure from the US dollar index, the Dow Jones may be less likely to make a rally until late December. The Dow Jones slightly breached above 12,187 but is now volatile and backing down. The temporary support is at 11,850-11,800. If this support can’t hold, the Dow Jones may head down to 11,727 and 11,500-11,450. Unless the Dow Jones breaches above 12,187 and 12,284, the probability that the index will make a rally until late December is low.

 The SET index, however, still slightly out-performs most world equity markets. Compared to the Asia Pacific, there is a small upside gap, indicating that the SET is close the overbought level, relative to the region. The similar pattern is seen in other markets as well. The SET may continue the rally until late this month, but at the slower pace. 

Also, the index has tested the barrier at 1,050 last week and couldn’t pass above that barrier. The risk factor is rising now and I’d like to have a stoploss line in the SET at 1,026.

 In sum, the risk is now rising as the US dollar index has breached above its barrier and the Dow Jones is backing down. But, the small upside in the SET is seen, and the index may out-perform the region for a short while. Do have a stoploss line and ease off buying. 

Thanks again Ploy! You can contact her directly @ ploy@thaicapitalist.com

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