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The S&P 500 has done well since last fall, with a large percentage of its gains taking place after the Dollar peaked in Mid January! The lower left hand chart above reflects that the Dollars decline has been helpful to the 500 index and Gold over the past 6 weeks.
The top of the “Cup & Handle” pattern, which is line (1) has been support and resistance numerous times over the past few months. Ever since the Dollar crossed below line (1) it has struggled to get back above the top of the cup resistance.
The Dollar needs to break the top of the cup resistance line and line (2) for it to have a major impact on the positive momentum of the markets. If line (1) and (2) are taken out to the upside by the Dollar, look to reduce long holdings!