U.S. Steel (X) at Technical Crossroads

Purely from a technical perspective, United States Steel Corp. (X) is retesting its late-July, early-August upside breakout zone between 30.00 and 32.00, which at the time, unleashed a powerful upside follow-through off of the near three-year base/accumulation pattern.

The thrust and climb to 46.55 met exactly the measured upside target off of the base.

Let's notice that during the past near-three months, X has returned to its breakout plateau, which is classic price behavior after an upside breakout and target fulfillment off of a big base pattern.

The question now, however, is whether or not the weakness in X is a correction prior to a much larger upmove that completes the larger symmetry of the entire pattern off of the Feb 18, 2011, high at 64.03?

If the answer is "yes," then somewhere in the 30.50 to 26.00 support zone, X should pivot to the upside to initiate a super-powerful advance that propels price beyond 46.55 towards 60.00-64.00, thereafter.

My suspicion is that if the acute strength in the Shanghai Composite (+33%) since mid-October is rooted in a forthcoming revival of the Chinese economy, then X should be a major beneficiary.

Secondly, if the U.S. Dollar is nearing a peak and a period of corrective weakness (based on my medium-term work on DXY. EUR/USD, and USD/JPY), that, too, should buoy demand for X products.

For now, let's watch X closely for signs of the completion of the Sep-Dec correction, and the initiation of a new upleg.

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