As hoped, bonds have bounced and are now testing the top of the descending channel. Despite this upwards push, the market has continued to fair well, with dips being very, very shallow and aggressively bought so far. We have since pushed from SPX 1330s to 1370, a level that many are watching, and one that is proving to be quite stubborn.
While a selloff in the bnods would be bullish for equities and allow us to push through the bother of SPX 1370, the US Dollar is telling a slightly different story, via the UUP.
The UUP is resting on the 200 SMA on the daily, and the 50 SMA on the weekly. While the correlation between the dollar and the market has loosened recently, this kind of support may cause the USD to rip enough to make a difference.
If the DX, and correspondingly, the UUP, lose these levels, then I think we should strap in for a trip to the 1400s. For now, however, I continue long. And although I am scared, I'm leaving it to my stops tell me when I'm wrong.
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