Watch Out for a Counter-Trend Rally in the Dollar Index

While the market indexes did fall last week based on the extreme overbought condition we had going into the week, there is more to the story than that. Two months ago, in mid-July, the S&P 500 closed at 2460. It currently stands at 2460. In mid-June, it stood at 2450 as well. So it's not as though the last three months have seen a lot of action.

The real action in the last few months has been in currencies and bonds (and commodities too). This is where we see some extremes. For example, the Daily Sentiment Index (DSI) for the euro stands at 93%. As a reminder, this measures the percentage of bullish indicators. So if you flip it around, that means a mere 7% of indicators are bearish the euro....414 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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