Much thanks goes to Steve Garner – Gatetrader – for his ongoing insights found in the commentary section about the S&P, crude oil, volatility, and interest rates.  He taught me almost everything I know about bonds and interest rates.  Along with Ox, another great trader, he opened my eyes to inter market dynamics and paved the way to foreign exchange trading.

The dollar has been slapped around for quite a while now.  There are signals which suggests a trend change is in the making which will have a profound effect on commodity prices and markets.

In early March a wolfewave pattern gave rise to a topping pattern in the dollar index.  Now there is a clear positive divergence (lower prices, higher momentum) which was confirmed in Friday’s trading session.  The larger structure suggests that an Elliott 5-wave pattern has completed, and in the weekly timeframe there is pocket support and the presence of a large A-B-C structure.

Crude Awakening

Crude oil drives both political and psychological markets.  It is now against pocket resistance on the daily charts at 72.  This swing trade will be very profitable on a move back to the lower 60′s to form some type of channel or symmetrical triangle pattern.  Pocket support will be around 62-63.