On October 19th, the Dollar had a large rally, ¬†breaking above a bullish falling wedge and I produced the chart below (see post here).¬† The point of the top chart…Dollar had a big single day move, yet “one day a trend does NOT MAKE!”

 CLICK ON CHART TO ENLARGE

As the photo in the chart suggested, the Dollar move at the time, seemed like a “Fakeout”¬†to me at the time.¬† See updated chart on the Dollar below.

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Today the news will be “Driven” by the QE2 story. In my opinion, the key to asset performance will be driven by what the Dollar does at (2)!¬† The Dollar is testing key support for the SECOND¬†TIME and the 500 Index is testing key resistance for the SECOND TIME (see post here).

Currencies are in the driver’s seat, fasten your seat belts!¬† As I¬†have shared before….The “Second test” is where the real action starts!¬†¬† If the Dollar fails at support, investors will want to own the breakout in equities.

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