I am going to continue to watch the US Dollar this week as the primary “tell” on the equities markets. We have bumped up against June and August highs on the S&P, but failed there Friday. If the USD continues to stay weak, we’ll see new swing highs on the S&P, Dow and Naz, as well as Gold and Silver.
If not and the USD decides to swing back to the upside, the indices will likely take a breather, revisit that gap at 1104 and then re-set for a move higher.
So far September has been uncharacteristically bullish, almost to a fault. The consecutive daily win streak is causing overbought conditions, so it would not surprise me a bit to see a simple pullback to support on the S&P and then head higher. Fed, elections, M&A, etc. all seem to support the market here, but I will use the US Dollar as proof of things to come.
Have a great trading week and trade the extremes!