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Let’s analyze the dollar on a weekly chart…

Not only commodities, but most all asset classes have been trading inverse to the $USD. The dollar holds the key as to when the correction will begin. It has been holding $78 lately. There is a small likelihood that it will correct to $76, corresponding with the market rallying and SPY filling its gap. Again the charts can do this analysis much more justice than any words.

usd

Either the dollar is going to break up through the downtrend line, hence a rally for the $ and a correction for the market, or the $ is going to break support at $78 and head down to $76 area. That would correspond with a higher push in the markets and commodities. The important thing here is to watch the move in the $ over the next week or so.

You can also watch UUP , which is looking good on a daily chart today if it can get through the 50 dma slightly above:

uup

September 1, 2009 Posted by | Legacy Funds | , , , | 3 Comments