Friday, October 30, 2009

Market Observations - Dollar and EURO

The dollar held support yesterday. As long as it does not break it, I believe the down-trend in the market will persist and charts that are still not broken such as Oil and Gold will break. Contributing to this view was the large negative divergence at yesterday's close between the EURO and equities. This divergence pointed to negative prices today...I would continue to watch the EURO and SP500 for divergence. New highs in the EURO are usually foreshadowing of SP500 new highs and failed highs in the EURO are reliable and early indicators of failure in the SP500 especially when the SP makes a new swing high.
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