Here’s 2 Charts Scott looks at before buying anything in this market. – September 26, 2022
SPY UUP QQQ TNX--X
This is Scott with your Chart of the Day. I want to show you 2 charts that I look at before wading into the waters of risk in this market.
Now, as you know, the market has been brutal. Here on the SPY ( NYSEARCA: SPY ), we’re back down to the June lows. Now, whether or not the June lows hold is up for debate, we haven’t figured that out yet but it is definitely an important area.
Before I get into trading there are 2 charts that I like to look at just to see if I am on the right side of risk. One of those charts is the US Dollar ( NYSEARCA: UUP ). The US Dollar ( NYSEARCA: UUP ) has been called a wrecking ball because the stronger it gets the weaker a lot of risk assets get.
We’ve seen that here just here on the chart, the US Dollar ( NYSEARCA: UUP ) has been in a really strong uptrend all year and the SPY ( NYSEARCA: SPY ) and the QQQs ( NASDAQ: QQQ ) have been in a really strong downtrend all year.
So this is really, in my opinion, the new chart of truth. Because as long as the US Dollar ( NYSEARCA: UUP ) is in a really strong uptrend it is going to be hard to make money swinging stocks or holding stocks, for a long period of time. So in this market, in my opinion, you have got to be in for a good time, not a long time, as long as the US Dollar ( NYSEARCA: UUP ) is in a strong uptrend.
The other chart that I look at every day is the TNX ( INDEXCBOE: TNX ). Now as you know, rates have been going up and this chart, again, is in a really strong uptrend, above all the major moving averages. So until we start to see some consolidation in rates or even a breakdown in rates, once again, it’s going to be hard to make easy money in this market.
So be sure and check out what the US Dollar ( NYSEARCA: UUP ) is doing and check out what the TNX ( INDEXCBOE: TNX ) is doing before you start buying any of the dips here ( NYSEARCA: SPY ) in the market. That’s something we have been telling members for the entire year and, hopefully, it is something that can help you.
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