Tuesday, December 9, 2008

Dollar crawl

We've been looking for weakness to develop in the dollar as a necessary ingredient for any market rally sustainability. I've been pointing out the "crawling" action in my nightly updates as a sign of a coming break. Yesterday the dollar finally broke down out of that pattern. Often when this pattern breaks a quick move down to support will unfold. Support for the dollar would be at the consolidation zone of the T1 pattern between 76 & 80.

A move back to that level would likely correspond with an impressive rally in stocks and especially commodities.

Just another sign that we have probably seen the bottom and are starting an intermediate term bear market rally.