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This morning veteran technical analyst Chris Kimble checks the weather forecast.
Chris explains: Weathermen know certain patterns increase odds of certain weather events.
If the satellite sees the familiar pattern of a hurricane, odds favor it will take place, yet when and where it will hit or if it will make land fall, remain in question.
My research suggests that the current patterns in the VIX and S&P 500 increase the odds to around two-thirds that a storm is on the horizon.
Let's see if this "Power of the Pattern" forecast is on track.
Consider the following:
These patterns are taking place at the same time sentiment on the U.S. Dollar has turned rather bearish. According to trade-futures.com only 13% of investors are bullish the Dollar. Two months ago when I posted to sell the Dollar and buy the Euro (June 14), bullishness on the Dollar bulls was over 90%. Odds suggest that the Euro advance and the Dollar decline had much to do with the equity rally!
Now the Dollar finds itself on 20-year support resistance lines, shown here.
Hm ... Rising wedge in the 500 index, falling wedge in the VIX, dollar bulls now only around 10%. And the forecast is?
Stay tuned for the results.
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