DXY Divergence

While reviewing my charts today, I noticed this divergence in the Dollar index. Even if the Dollar does rally strongly, I have no idea what effect it will have on stocks. I can guess commodities priced in Dollars might see some downward pressure, but trying to sort out the various cross currents at this point is almost pointless. The Saudi Arabian stock market closed down 5.0% today (Sunday 2/27), but that weakness was not seen across all middle eastern markets that were open.

If the US market continues higher, while shrugging off a stronger Dollar and Middle Eastern political instability, I would read that as very bullish signal. I’ll be watching the overnight action closely, and playing this upcoming week very cautiously.