the snp completed a secondary test on
friday and thursday night. Few contracts were pressed on the market. This indicates that this stage of hedge fund liquidation in the stock futures is over and a rally can be anticipated to begin shortly. Friday was a reversal day with a close at the top.
Dollar index-- The dollar index broke through its support thursday and failed to rally friday. Distribution began 10/23. There was little demand on the rally from 10/30- 11/19 followed by a sign of weakness 11/24, 25. The next 3 or 4 days showed some support which then petered out and liquidation began monday of last week. No day exceeded the previous day's high all week.
The other currencies are in the same position more or less.
Gold-- Similar but inverse to the DX. It has not broken out yet.
The point from the above is that this stage of hedge fund liquidation has ended and with it the rally in the dollar. We shall soon see if that liquidation covered up a currency crisis and now in the midst of and because of quantitative easing foreign funding slowly disappears. The battle for middle earth continues.
