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SPX, NYA, US Dollar, and VIX: Inflection Point at the Edge of the Cliff

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The bears have now pushed the market right to the edge. Whether we go over or not may come down to Washington.

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Since many fractals mimic others, I often look at related markets in order to try and gain insight and clarity. I pay close attention to the currencies -- though the reality is that currencies are not always correlated to the equities markets, they are usually helpful clues. It's generally a decent bet that a falling dollar equals inflation, which typically means higher prices in dollar-denominated assets, such as equities.

The US dollar hasn't quite "locked in" a bearish fractal, but it's come awfully close... so no "definite answer" yet here either. The red wave 2 high is now key for dollar bulls to reclaim, while the red b/ii low is key for dollar bears.


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The Volatility Index (^VIX) suggests at least a near-term bottom may be near for equities. If the bull count still holds water over the intermediate term, bulls need to find a bottom quite soon.


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No positions in stocks mentioned.
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