The US Dollar has broken out of a triangle to the upside today (see chart below). The euphoria over the Chinese stimulus has faded, and traders are reminded of the ongoing fragility of the world’s financial system. Stocks are trying to gain some traction this afternoon as Blackrock’s CEO Laurence Fink talked up his position made optimistic comments about thec state of the stock market.
The Dollar Index broke out to the upside today.
The Yen/Euro cross has been a good barometer of the health of the financial system. The chart below is a daily chart of the Yen/Euro cross (futures basis) as the red line, and a daily chart of S&P futures as the blue bar chart. The decline in the cross is a negative sign for stocks, and continues to bear watching.
JPY/EUR and SP Daily
