US Markets - Feb. 01, 2010

The DJIA attempted a rally on Friday from short-term oversold conditions...managing to rally up 100+ points before rolling over and making a new weekly low. It is now Monday and the markets will try to levitate one more time. If the markets fail to gain a foothold here...we will take aim at the 9600 level before the week is out. As before...everything hinges on the dollar. The USD hit the 79.50 area and so far has bounced off...if it is unable to break this level it should setup a retracement to 78. Likewise, EUR/USD has performed splendidly, and is potentially getting ready to take a little breather...potentially getting back to the 142 area. Essentially these pauses are minor and in the larger picture, inconsequential...as the larger picture shows the direction for the markets is down, and the direction of the US dollar is up. These pauses provide excellent opportunities to add to short positions, or sell any remaining long positions. Weekly commentary will be posted tonight. Good luck and Good trading. -Dio.