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[autobot]

A few days ago I posted here that the U.S Dollar Index had signaled that it was trending on a daily basis, but that it had also met resistance and should pull back. In the context of the Autobot logic, this means that the Dollar has established an uptrend on the daily time series and higher targets were likely, after a pullback. That pullback has occurred as of this morning, and the software has signaled a long on a swing basis. Also, GLD has fired a short signal at $105.35 for target of $104.65. Once reached stops at $105.81 would be moved to entry and a test of the lows would be the target. EURUSD and AUDUSD look especially vulnerable as well.

But more importantly overall, the dollar index signal indicates the potential for a sharp move higher. If it occurs, equities, and commodities will depreciate, and in this case violently. The Dollar short trade remains crowded. Prior to another leg down, the expectation is for a spike higher that causes extreme pain to the shorts without "ultimate psychological conviction." As the dollar index has fired it's signal, it warns that today's strength in equities, gold and foreign currencies could erode over the day.

We posted here yesterday afternoon, that ES had likely reached the end of a B at 1054 area and C should commence. Targets are higher for the top of a C and the gap certainly supports this. But, the current situation in the Dollar is of concern to March ES marching higher,a s is the inability of Autobot's Advance Decline indicator to move to long side. A move to the gap will not stop at it's fill. And a very disappointing day for bulls could occur. Stops should be tight.







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