Forex Land

Forex land has my eye today, specifically the US dollar index (DXY). 88.71 is the swing point from 2010 that it seems to be intent on exceeding, and if it achieves it, the "death of the dollar" will have to be postponed for a while, perhaps much longer than anyone expects.

A stronger dollar will further exacerbate trouble in commodities, as well as trouble throughout the world of credit and debt. Central bankers fear this development almost as much as they fear deflation.

So does Russia.

Source: Stocktwits

I feel the stronger dollar is a symptom of deflation, as more and more debt gets retired (or defaulted on) as confidence wanes.

Regardless, I don't see it as bullish for stocks, just like I don't see falling oil as bullish. They are both part of the changing landscape of psychology from expansion to conservation.

This will impact the S&P in a huge way. Just not yet (unless 1991.40 breaks).

Even this wave count could be missing the big picture. So far, there seems to be developing five wave sequence down. Whether it's the first wave of a developing impulsive move (down) or wave "a" of a small a-b-c for wave four remains to be seen.

However, I am also watching the 10-year for clues. And yields are higher over the last two days. Persistently higher yields would be yet another warning. But that's for another day.