🏆 Today's Chart of the Day was shared by Steve Strazza (@sstrazza).
- The S&P 500 has retraced nearly half of its recent decline after logging back-to-back +1% days. Still, other critical areas remain unresolved.
- The Equal-Weight S&P 500 ($RSP) found support at the AVWAP from the April low (blue), but a five-month topping pattern still looms. New highs are the only way to kill this bearish setup.
- The US Dollar Index ($DXY) is showing the mirror opposite pattern. It’s approaching the AVWAP from the January peak after carving out a six-month rounded bottom. On an optimistic note, if these reversal patterns fail, risk assets could see a sharp relief rally into the New Year.
The Takeaway: The S&P 500 has bounced sharply over the past two sessions, but other key areas have yet to confirm, with $RSP and $DXY still threatening to reverse.
