In the chart below, the pattern reflected that the Dollar broke above resistance and is now testing the old resistance as support.(see post here)  Odds are high this Dollar decline since last Friday, has had much to do with the 4 day rally in stocks. 


On the flip side, the chart below reflects the opposite…The Euro is kissing resistance!  (See Euro/FXE quote)


I’m sorry to bore you with several currency posts, yet I remain of the belief, that if we can get the currencies correct, how we structure our portfolios becomes much easier!  In my humble opinion the situation in the Dollar/Euro right now and its outcome in the next few weeks will be one of the most important outcomes we have seen in months and months!

The decline from late July to early August, where the 500 index fell almost 20% in two weeks was a rare event.  Carter Worth of Oppenhiemer this morning shared on CNBC this type of decline has only happened 3 times in history.

What the currencies do from here will determine if we see more of these type of declines in the immediate future!

How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past