Here's the deal. The Dollar is getting hit hard this morning after a much weaker-than-expected GDP number but, so far, it's holding right at trendline support at around the 114.90 Yen level. Now, some of you may be asking yourselves, "What's the Dollar got to do with the DOW?" A lot, actually. If you were to place a chart of the Dollar over top of a chart of the DOW futures you would see that their relationship is inverse and fairly consistent. So, here's where it gets interesting. If the Dollar is able to hold trendline support and rally off of today's lows we should begin to see the DOW turn lower. Also, the Dollar is reaching fairly significant OVERSOLD levels just as the DOW is getting into OVERBOUGHT territory. We'll keep watching this pattern to see if it holds.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
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