Signals · theoretical, educational setups
Dollar at a 19-Month High as AMD Gives Back Its Rally
Four theoretical setups for the week of November 16: the dollar index at its highest close in 60 sessions, AMD after an 8.75% drop, ether at a new low and Cisco after its setup failed.
DXY · US Dollar Index — Bullish, Short-term (days). The dollar index closed Friday at 103.41, its fifth higher close in a row and the highest in at least 60 sessions, near its strongest level in 19 months. Every support for it moved the same way this week: the 10-year Treasury yield rose about 30 basis points to 5.15%, futures price a December Fed hike as certain, and two Fed officials, Daly and Collins, leaned towards more tightening on Friday. The index sits above its 20-day average near 102.08 and its 50-day near 101.41, both rising. Monday's speech by Fed Chair Warsh is the next test. A daily close below 102.20, under the November 10 close, would invalidate the setup.
AMD · Advanced Micro Devices — Bearish, Short-term (days). Thursday's rotation out of Nvidia lifted AMD to $585.30; Friday took most of it back, with an 8.75% fall to $534.06 as the semiconductor group sold off and Arm dropped on a report about Nvidia's succession search. The stock is back below its 50-day average near $554.55 and only about $15 above its 20-day near $519, so the post-resignation bid looks like a one-day trade rather than a change of trend. Nvidia's results on Tuesday will move the whole group and can cut either way. A daily close above $560, back over the 50-day average, would invalidate the setup.
ETH/USD · Ethereum — Bearish, Short-term (days). Ether closed Friday near $1,930, its lowest daily close in 60 sessions and down about 6% over two days, after more than $1.4 billion of leveraged crypto positions were liquidated, most of them longs. It trades well below its 20-day average near $2,219, its 200-day near $2,149 and its 50-day near $2,416, all of which now act as resistance. Bitcoin's weakness, with the largest corporate holder trading below the value of its coins and facing an MSCI index exit on November 30, gives buyers little reason to step in quickly. A daily close above $2,060, back over the November 11 close, would invalidate the setup.
CSCO · Cisco Systems — Neutral, Short-term (days). Yesterday's bullish setup failed on its first day: instead of extending the after-hours gain, Cisco fell 6.24% to $95.64, below the $98 invalidation line, as investors focused on a gross margin down 2.5 points to 65.6%. The stock is now under its 20-day average near $103.49 and its 50-day near $107.76, and sits about $1.80 above the $93.85 close of November 6, the lowest in 60 sessions. That level decides the next leg. A close below it would open a lower range, while holding it after a record quarter and a raised outlook would show buyers defending the dip. Until one happens, the evidence is balanced.