The dollar genie is below. The gray down trend line that we just broke over is now support. The pattern will not look well with a substantial pullback below this line and I do not anticipate one. That means, we should temper expectations for a pop in the indexes.
There is some additional resistance from the green down trend line at 76.78. A break of this level targets trend reversal confirmation levels at the two red lines. This, in turn, confirms the dollar trend reversal.
So, what this chart looks like is that it is preparing for a large range up candle - and SOON. Sure its overbought...but the markets were overbought for months and still went up - but the dollar has much stronger fundamentals supporting its rally than the stock market did...it also has a much more emotionally and rationally attached contingent looking for a dollar collapse. So, I would temper expectations somewhere between a slight pullback for the dollar and pop for the markets to a mild to negative reception to the GDP numbers triggering a range extension to the current moves in both. The markets do not like to let you into a trade if they don't have to. The dollar chart says to me that Mr. Market is not going to make a lot of room to get short equity indexes and long the dollar.
I have not been posting that much lately as I have had two deaths in the family...hopefully I will be able to get back to normal soon.
