General Update - US Dollar and Stocks

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The chart above is the US Dollar index. I had mentioned a week or two back that there may be a super bullish interpretation of what is going on there from a pattern standpoint. I have put that on the chart now as it seems more likely it could be in effect. In brief, I expect some continued upwards or sideways action in the US dollar, and possibly an accelerated crash in the Euro over the coming days/weeks.

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This is a chart of the S&P 500. So far it is following relatively closely to what has happened after some comparable instances in the past. That is......a sharp rebound after the "crash", then a retest of the closing low. The futures are down as I type and so we may open weak tomorrow, at or near the recent "crash" low. But from a pattern standpoint I see the possibility that this could get bad fast. Basically, if the market closes below that 1110 level for more than a day, I think it could tank over the next couple weeks.

That being said, the daily technicals are oversold, and if this correction is part of an ongoing bull market, it should not get much, if any, bigger than it is already. On the flip side, the weekly technicals have only just started to turn down. So I think the weekly trend is likely to win out.

There are some conflicting ideas here.

1) We already crashed and the market should retest the crash low and then rebound over the coming months

2) We are in the early stages of a large new decline

I don't know for sure obviously, but use the notes on the charts as a guide to my thinking.