Courtesy of Chris Kimble
Flag patterns are created by a series of lower highs and higher lows. They often tend to frustrate both the bullish and bearish crowds, since the majority of investors aren’t making monies.
These patterns aren’t good per suggesting which way the breakout will be, yet when it does, the move is usually quite large!
These flag patterns below become very important, because they are taking place in the currency markets. Why are these flags more important than most flag patterns? The majority of the time major currency moves take place they have much to do with the “risk on/off” trades and portfolio construction.
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The above charts were made a couple of hours before the markets opened, so these moves could change, yet early this morning key price action is taking place that should have a ripple effect on portfolio construction!
I shared last Friday that the “Rocking Chair markets” had to come to and end soon (see post here) This early mornings price action, which looks to be creating a breakout in the Dollar/Breakdown in the Euro hasn’t proven a thing by this pre-market action, yet it does raise a ”HUGE CAUTION FLAG” per the amount of risk assets in a portfolio one should own!
The chart below was posted on 7/6 (see post here)…
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With the Dollar attempting to breakout this morning… the resistance mentioned in the above chart becomes much heavier.
Last Friday I mentioned that the DJ Trucking Index had created a large bearish upside wick along a resistance line that had witnessed several key reversals (see post here).
This index has performed much better than the 500 index over the past few years and each time it struggled at resistance, it seemed to impact the broad markets! Use this index as another key to confirm the Dollars move this morning and whether investors should adjust portfolios!
