Dollar Close to Upside Breakout
The dollar continues to work higher compared to all other markets including gold. This is a result of the important support levels that held recently and the fact that all the safe havens like emerging markets and tech stocks are not feeling so safe anymore. A question was asked this morning as to what price level would I consider a clear upside breakout for the dollar. I would use the ETF UUP and a price level close above 21.97, that eclipses the important low close of November 4, 2010 and the May 23, 2011 high of 21.86. At the moment it is trading at 21.64.
The S&P 500 has clearly breached the 1277 annual swingpoint to the downside and the new trading area mentioned recently is now in play.
Washington Deficit reduction that is out of sync with the reality of the secular market cycle remains the number one factor that is destroying the economy and the markets. At some point the Obama Administration has to put their foot down and make it clear that the destruction of the middle class over the past 20 years has to be fixed first and the first step is to raise taxes on those above the middle class. Seventy percent of the economy has been destroyed by the shift of assets to the gated community class. The middle class are our biggest consumer group and there will be few new jobs until this class is reinstated to its central role.