Another reversal?

Here's an interesting weekly chart of the US Dollar index. This usually has an inverse correlation with the market and lately its been particularly strong. Look at how oversold the indicators are and how it's approaching a strong two year support level. It's still firmly in its descending RTC channel but I'm starting to think a reversal may be coming soon.

At its current rate, I'd give it another week or two. If the dollar starts moving back up, that will make me consider a market top is soon to follow. The Dow also came within 13 points of its 200 day moving average today. Tomorrow should be interesting to see if it can break through that level (10,974). I don't expect a major change in trend but maybe a correction like we saw in June.


At the moment I'm sitting on the sidelines - not buying or selling. Right now I'm 40% in cash and my YTD trading return is 21.3%.