Dollar Breaks Support as S&P 500 Builds on Bullish Reversal Setup

THE TAKEAWAY: The US Dollar broke below a significant support level, opening the door for further weakness, as the S&P 500 built upon a bullish reversal chart formation. S&P 500 – Prices are testing initial resistance at 1357.40 after completing a bullish inverse Head and Shoulders (H&S) pattern with a break above neckline resistance in the 1334.40-41.90 area. A break above this level exposes 1392.10. Broadly speaking, the H&S setup implies a measured objective at 1419.90, conveniently at the year-to-date closing high. The 1334.40-41.90 region has been recast as support.

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CRUDE OIL – Prices continue to tread water between the 23.6% Fibonacci expansionat 81.07 and the June 7 high at the 87.00 figure. A break higher initially exposes 90.14. Alternatively, a push through support targets the 38.2% expansion at 77.34.
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GOLD – Prices pulled back to retest the 61.8%Fibonacci retracementat 1616.23, a barrier reinforced by former resistance at a falling trend line set from early March. A break below here exposes the 1600/oz figure. Near-term resistance remains at 1637.35, the 76.4%Fibonacci retracement, with a break above that exposing the May 1 high at 1671.49.
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US DOLLAR – Prices broke support in the 10066-70 area marked by a confluence of the 50% Fibonacci retracement and the 38.2% expansion to expose the 61.8% level at 10010. A push through this level targets the 76.4% retracement at 9936. The 10066-70 region has been recast as near-term resistance.
 
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"" S & P 500 Builds Downward Momentum as US Dollar Breaks Out Higher ""

10 May 2012 01: 11 GMT THE TAKEAWAY: The US Dollar has cleared key resistance defining the down trend since mid-March while the S & P 500 is starting to build to catch up to the downside.

S & P 500 - Prices Fraktur a pair of Hammer candlesticks identified yesterday with a break through support at 1363.50, the 76.4% Fibonacci expansion. The bears now set their sights on the 40 1339-1347 40 area, marked by the 100% Fib expansion as well as the 38.2% tracing of the rally from the December 19 2011 swing low. A push below here exposes the 50% tracking at 1313.00. The 1363.50 level has been recast as near-term resitance.

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CRUDE OIL - Prices continue to grind through support in the 95 78-96 56 area marked by a horizontal barrier in play since early November 2011 as well as the 100% Fibonacci expansion. A break below this exposes 92.51. Near-term resistance lines up at 98.89, the 76.4% expansion.

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GOLD - Selling ongoing after completion of a Triangle chart formation carved out since late March - a setup indicative of bearish continuation - with prices narrowly taking out support at 1591.00 marked by the 50% Fibonacci expansion. The bears now aim to challenge the 61.8 percent level at 1569.73. The 50% Fib has been recast as near-term resistance, with a push above that targeting the 38.2% level at 1661.75. Longer term, the Triangle pattern implies a measured downside objective at 1548.21.

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US DOLLAR - The move higher marked by the formation of a Morning Star candlestick pattern identified last week continuous. Prices broke above resistance at a falling trend line established from mid-March. The bulls see the next layer of resistance at 10047, the April 5 high. The trend line - now at 9963 - has been recast as near-term support.

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