The Americans have done it again – a V-shape reversal after a steep drop. Many traders got used to it, but many others are still surprised. The way in which things are playing out is impressive and most probably scares off potential sellers, which is an additional bullish factor here. First, let's take a look at Nasdaq, which defended 7,000-point support (green) and went higher. Another day, another dollar one could say. That reversal cancels any sell signal. Bears can consider opening short positions only after the breakout of the green line, which is currently less likely to happen.
Another one is the SP500, which for the past few days has been drawing a pennant formation. The pennant resulted in an upwards breakout. The upwards trend line was defended and the horizontal resistance at 2,790 points (orange) was broken. That is a signal to go long.
And lastly we have DXY, which is back on the right path after defending the 50% Fibonacci with a triple bottom formation. Actually, at the same time, this is a denied descending triangle pattern. It does not matter though, as both of those formations give us a buy signal, especially after the breakout of those two blue dynamic resistances.