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Now what?

From Sep 2010 to Oct 2010

Dollar (UUP) fell:  (24.2-22.2)/24.2 = 8.2%

SPY rose: (119 .13-104.31)/104.31 = 14.2%

Assuming a inverse relation, 1% drop in UUP lead to 1.73% rise in SPY!!!

So if UUP were to retrace 38.2% of the fall from June 2010 => it will reach 23.64  => rise of  6.6% rise in UUP => 6.6*1.73 = 11.22% fall in SPY =>  119.13(1-.1122) = 105.7 on SPY

Its a guess but my roadmap will be:

  • All the indicators are overbought, $NYSI has turned. Sooner than later we shall see a correction.
  •  So (if we fall from here) I am guessing that SPX  1060 or more (1057 to be precise) into November 2010.  
  • Another strong contender for support is at SPX 885 based on a lot of Fibonacci confluence. This will be equivalent to UUP retracing alomost all the move from June 2010 to 25.5  or up by 14.82%.

Lets see what really happens.

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