New Theme These Day: Dow Up and Dollar Down

I hope everyone's having a good week so far. Sorry about not posting TLT Trender Signals this week, I was a little overloaded with work when I got back in town.

There seems to be a new theme of "Buy Stocks and Short the Dollar" these days and it's a trend that we haven't seen for a while. Does that mean we've seen the bottom for equities? Perhaps. Will stocks come crashing back down after everyone loses faith in the government's latest plan to save the day? Could happen as well. So what do you do with these conditions? Look at the recent price action and determine (beforehand) what actions you will take depending on how prices play out. Come up with your buy/sell points and be sitting back ready to pull the trigger if the conditions you plan for occur.

Here's a S&P 500 Chart:Notice that I have marked several spots on the chart: 1) the rsi, 2) the support just over $800, and 3) the 20 day ema. If the S&P pulls back to 800 but closes above the support line and the rsi is still not oversold, I'll be looking to go long. I'll also be keeping my eye on the 20 day ema because it could be a could point to buy into the market in the near future.

Okay, now for the dollar. Here's a chart of the Eur/Usd pair:
All of the indicators on the chart remain bullish (trender lines are both green, fisher transform is above moving averages and has been moving up and the bb width has been expanding from a narrow base) and now we're starting to see some congestion on the daily chart. The pair looks to be forming a flag, which is probably a bullish sign. I'm going to wait for a break above or below the levels pointed out on the chart and then trade in that direction because currencies have a habit of forming bullish or bearish patterns and then quickly trading in the opposite direction.

Best thing to do now is to plan and be patient...don't rush into any trades in this market.

Good luck out there.

TLT