Good Morning Traders and Investors,
As I mentioned last week in the monthly gathering of the Park City Taders and Investors, if equities continue to the upside, the dollar should continue to weaken.
The dollar trend is down, but it had a few trendlines, potential double bottoms forming, BUT, since last week, the equities are higher AND, da da da!!!! the dollar is weaker.
NOT every currency has gained significant ground, BUT in the charts above, the USD/JPY is at a critical level AND the EUR/USD did break out above that critical 1.5000 level.
Where to next? Rick Santelli of CNBC thinks the EUR/USD is headed to 1.5500, not a massive move given the explosions we have. If that is the case, that would give the $SPX another 30-80 points or so and get it closer to the 62% retracement of around 1150-1200
In the meantime, Gold is soaring towards 1200/oz and the markets just keep flying. Obviously the weak dollar is helping the markets and employers aren’t being SCROOGES during the holidays – unemployment claims dropped – big time – the lowest since FEBRUARY!
The dollar is critical and without anyone rushing in to it, it seems the equities have more room to the upside.
Happy Trading and Be Environmentally Cool!
