Dollar Breakdown

It finally happen, the Eur/Usd pushed through the upper linear regression trend channel and it did it with ease. Also, the TLT Trender system just gave a buy signal for the Eur/Usd on the daily chart. Take a look:
Now we'll have to see whether this is a valid trend reversal or just a false break out. I always go with the trading system and take whatever trade it says to make...which is a buy right now...but its hard to do. It's hard to be confident in the currency market because there are some major forces (central banks) at work that can create and end major moves like this one in a matter of days and even hours.

One thing that I like to do in this situation is to check out the weekly chart to get a feel for the long term trend. As you can see below, the primary trend is still down and the chart is still giving a sell signal (both moving trend lines are red). There is also a long trend line (yellow line) that is still not broken...we'll have to watch the pair as it approaches that potential resistance. For now, I'll be looking to go long the pair on much shorter time frames until a sell signal is established on the daily chart.

As for stocks, it looks like we're set for an ugly open. I'm sure that you've heard no less than 20 times by now that the auto bailout is dead and there is word that GM has hired bankruptcy counsel. Should make for a fun Friday in the stock market.

Good luck out there.

TLT