Let's look at the US majors and their correlating indicators.
This should be an easy up week for stocks as the SPX clears 1940 inbound for 2000. Look to enter long on your S&P cousins at SPX 1914. ISM Manufacturing comes out at 10:00 ET Monday, so expect to enter long around 1894 the number is significantly below 48.6.
Receptively position your DOW correlated buy entries around 16300, or 16040 on a broader pullback or missed ISM estimate, with weekly targets at 17000 and 17360.
Adding support to this week's up market thesis is the falling 10 Year yield. Yes, price did reach a vital, high time frame support level at 1.95 but I believe that level will fail considering the strength in which price arrived and closed the previous week. As the Fed has tried to prove, falling yields are good for risk asset price appreciation.
We have to look at a monthly chart to see the last time the DXY was at its current highs (chart pictured below is a daily chart). Although I expect the US dollar to trend above par in coming weeks, accompanying a broader market sell off, look for a reversion to 98.90 level, or not. We could be witnessing a sea change to positive correlation between the USD and US equity prices fueled by the Fed tightening and BOJ/EU banks pushing their rates into negative territory.
Something to keep and eye on.
Happy trading.
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