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I'm more of a quantified process guy than a technician - but throw this chart onto the desk of one of those Depressionista Chartists, and ask them if they'd be long it... it looks just like Gold started to in March...

The governing factor in the REFLATION trade remains the US Dollar. As the Buck breaks down through my TREND line support level of 85.54 (thick red line), you're seeing US Equities charge to new intermediate term highs.

As much as lower highs (USD chart) are bearish, higher highs (SP500) are bullish. We all know this. We also know that volume has not been behind this rally (it hasn't been behind the market down days either), but Volatility (VIX) has been breaking down all the while - do those two factors offset one another? Good question... and one I will be delving into in the coming weeks. For now, my job as a risk manager is to manage the game that's in front of me.

For now, dollar DOWN = stocks UP, and I see risk in making this any more complicated that it really is.

Keith R. McCullough
Chief Executive Officer

Chart Of The Day: Breaking The Buck, and Shorty's Bank...  - usd1