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September 23rd, 2020 - PrymFX Forex Newsletter

Updated: Nov 4, 2020

It certainly has been an incredible three days in the markets. As we predicted in our Weekend newsletter: "Markets at Critical Point", it looks like our analysis was spot on. Our Short-Risk Oscillator is sitting in oversold territory, but our Long-Term Oscillator is still hanging on in Neutral. As we have discussed in the past it is normal for our short-term oscillator to be in oversold or overbought conditions for prolonged periods of time. It looks like any bounce we see in the next two days will be short-term in nature.

As we discussed in the last two newsletters, the U.S. Dollar index has broken out in the short-term as a "Risk-Off" event is occurring. The good news is that we believe we are closer to the end of this move than we are to the beginning.

Let's look at some charts.


The S&P500 broke down below the bear flag we had discussed in the last two newsletters. However, it looks like it found support in the 3,235 area, which is where our long-term trend line is. As long as this holds, we could be in for at least a short-term rally in risk. However, if it fails to hold, there is no support until th