Quick Technical Note on the Dollar

As we've been commenting on for some time, the dollar is the key to any rally or weakness. Since its breakdown below support last week, it has started rallying to retest the support/resistance level of 78.33. As of a few minutes ago, it broke to the upside. The key will be the closing value of the USDX today. A retest is not unusual, but if it holds through the end of the day, it may portend a reversal and a return of some credit issues. If it does not stay above the 78.33 level, expect that an acceleration of the dollar downward and a corresponding rise in asset prices is on the way.

As of now, stocks are up but commodities are down as the dollar moves up. Is the trend of 3 years of correlation breaking down? We'll have to stay on top of it.