US dollar lifting markets
by
, 04-26-2012 at 09:42 PM (1631 Views)
It appears that the US dollar is lifting the market, by declining. A falling US dollar re-prices commodities in the indexes higher, and is the so called wealth effect. Today, viewed on the chart below, on the US dollar index bullish fund (UUP), we see a break of the 200 sma, and technically a break of the 200 ema yesterday. The price percentage oscillator (PPO) shows that there is still room to roam lower. Further, the RSI is not oversold in the 30 area as in previous occurrences, as we see a value today of 40.57.
My cube trading system has flipped to a buy in the intermediate time frame. Breadth is mending, and some key hurdles have been surmounted. Bonds are still in the buy zone, which normally go in the opposite direction on market rises. Could it be that foreign investors are buying?
It seems that the ABC correction from SP 500 1422 is unfolding far differently that I had thought. But, it always does! The SP 500 A wave stopped exactly between the 0.237 and 0.382 fibonacci retracements at 1357, which is a little odd. Now the B wave is underway (I think) with an extension to SP 500 1447 or higher. The C wave to end the correction should still go down to the 1300 area.