NASDAQ 60MIN

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DOLLAR COLLAPSE/ BEARISH FOR THE MARKET????

I don't know at all that it will start to decline real fast from here..just thinking it could happen. If it starts to crater that will cause instability and fear. Markets can handle a slow decline and acutally like it...but fast gets people real concerned. Gold will soar even more as a safe haven in that event and world banks will try even harder and faster to diversify their foreign reserves which will mean more of a move away from the dollar into stronger foreign currencies and gold which may start to feed on itself. Some of the foreign central banks that have propped up the dollar seem to be getting cold feet. Instead of buying just dollars for their foreign-exchange reserves, they're diversifying into other currencies. The countries that reveal the composition of their reserve holdings put 63% of their new reserves into euros and yen according to an analysis by Barclays Capital (BCS). "Their incentive is to try to do stealth diversification". If we get a crash now they may be thinking get me out of here at any price. A dollar crash will further hurt us and other countries for many resons...hurts foreign economies..could cause trade wars..etc...A much lower dollar hurts our banks etc. My thinking is anytime you create a situation of fear and surprise that is not good for the markets in general. We will see if it happens and if I am right. One thing that is happening also is that short term rates have plummeted even more and that is hard to believe..but that is hurting the dollar...fear is still there in the market imo. What is your take?

SPX 60min chart

SOLF 60MIN UPDATE

SENTIMENT NUMBERS

Overview

Further yearly highs for the DJ Industrials caused a big rise in the bulls. Conversely, there was a plunge in the bears, to their lowest level since June 2004. The Dow just missed hitting 10,500, but it has been a rally with the “generals” (averages) moving ahead, but the “soldiers' (most stocks) not following along. Volume patterns have also been negative with many large traders on the sidelines. There were also another 400 stock buying climaxes which are suggestive of trading at tops.

The bulls rose to 50.6%, up from 46.1% last week and 44.4% before that. That new reading equals the bulls at the September peak and is just below the high at the end of 2007. The advisors remain very optimistic but we still haven't seen that final surge that achieves dangerous levels around 60%. Those were last seen in October 2007 when the record market readings were accompanied by 62.0% bulls.

There was also a sharp drop in the bears to 17.6% from 21.3% and 26.7% over the previous two weeks. That was a very quick 9.1% drop to show a large opinion shift by this group of editors. That was the fewest bears counted since 25-Jun-04 when they numbered 17.4%. June 2004 marked the end of a six-month consolidation following the strong rally off the 2002/2003 bear market bottom.

Advisors classified as correction fell to 31.8% from 32.6%. This group is mostly bullish but they expect an intervening market retreat before the rally begins. They look to buy on dips. Advisors often shift from bearish to correction before they are ready to make a bullish commitment and vice versa. The reading last week was a 12-year high of 33.9% on 25-Sep-97.

The difference between the bulls and bears expanded to +33.0%. That is negative and moving in the wrong direction. The spread was 42.4% at the October 2007 market top.