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US Dollar Positioning has grown to the highest Net long level in years (Since 2019) which would likely coincide with a reversal in US Dollar index (DXY) at a time when investors have likely overestimated the possibility of "Across the Board" tariffs, which thus far have proven underwhelming. This chart shows both the Citi FX Pain index (Blue) along with the Net Dollar CFTC Positioning (White) As the US Dollar begins to turn down, i expect this will help Emerging markets start to strengthen, & equity markets of India along with hard-hit Equity markets like Mexico, and China, might have been overdone, and ripe for a larger bounce.

DeMark hourly SPY0.72%  chart shows that within 3-4 hours this morning, SPY could likely face exhaustion on this rally which would gel with the current TD Sell Setup shown on 240-minute timeframe on the same SPY chart. Overall, this sets up for short-term peaking by Friday in both SPY and also Treasuries, and a possible low in the Dollar while the broader trend in Equities has begun to broaden out.

My estimation is that SPY likely will NOT move above prior highs right away, and this Elliott picture from "Elliot Wave Forecast" directly lines up with this view. Thus, a possible consolidation should be in store into end of month, vs. a "runaway train" up to 6300. However, following any "backing and filing" Equities should resume their upward rally along with rallies in Treasuries (yields lower) and a continued decline in the US Dollar.

Biggest takeaway by far since the Inauguration seems to be the Overestimation of aggressiveness of Trump's trade policies, as 11 of the 16 major currencies all rallied against the Dollar after Inauguration day, setting up a larger decline for the US Dollar at a time when positioning has grown extreme. As discussed last week, there was a big chance of "Sell the Rumor, Buy the News" in Risk assets, meaning that stocks, bonds had both slumped in December into January, but since have been rebounding. US Dollar index (DXY) on an hourly basis, shown here, has violated larger uptrends, and is making an Elliott-style 5-waves lower. This is bearish for the US Dollar and has directly coincided with Yields making a similar decline, while SPX has risen 5% since last Monday's lows (1/13/25) While some backing and filling is possible for DXY, it should come from slightly lower levels as shown below to create the final leg down of this move. History might be giving investors a warning, as the US Dollar also dropped during Trump's first year in office in 2017.

Canadian Dollar & Mexican Peso have both lifted off early lows which happened late last night on the announcement of 25% tariffs to both Canada and Mexico (China was left out) Thus, this move is exactly opposite of what most traders expected when Tariff announcements were made, as and both Peso and Canadian Dollar ("Loonie") are nearly positive on the day. Both Loonie and Peso had declined sharply following the Election but have begun to stall on this advance. As most know from the 2016-2010 period, the rhetoric proved to be more extreme than the actual results, and both Mexican and Canadian Exports continued to flow to the US. (Canada remains the biggest exporter of Oil to US while being the source of more than half of US imports of Wood) Overall, i suspect near-term gains are possible for both Peso and Loonie, but the weekly charts of both USDMXN and USDCAD still show both having an excellent chance of further gains in US Dollar vs. both. Key support for USDMXN lies at 20 and its expected that an eventual gain to 22.14 will happen. 1.426 is a key support level for USDCAD, but it's thought that a rise back to 1.4667 happens before a larger stallout. (Hourly chart of USDCAD shown below)

Crude oil has dropped about $5 since last Wednesday, and today's drop was specifically linked to Trump's signing of an Energy Emergency Act aimed at increasing US Energy Exports. However, but still no guarantee that this marks the beginning of Crude's downward slide. Rather, the attempts at bottoming after the early 2% decline today likely will result in a snap back rally where front month Crude futures lift to $77.90- $78.60. Above that level would drive Crude temporarily back to new highs given the bullish momentum over the last month. I expect Crude likely does lift to test last Summer's highs initially near $84.50 before it turns back down to new lows likely into Summer of 2025. At present, there's not enough to suspect Crude's decline will continue given the hourly pattern at work, and investors need to be mindful if/when Crude breaks the most recent downtrend and reclaims 1/20 peaks at $77.18

Gold and Silver have diverged lately, with Gold breaking out of its trend from last October's peaks while Silver has lagged sharply. Both might show some minor consolidation after these runups, but the patterns of both Gold and Silver should be favored for gains from February into the Summer and good likelihood of a push back to eventual new highs, above last October. Note that the pattern on the Silver chart (shown in yellow on this chart (Ishares Silver ETF SLV-0.20% ) looks almost identical to China's FXI, both which peaked out in October and have made lower highs. Overall it looks a bit premature to expect this move to continue in Gold back to new highs right away, but one should consider Gold and Silver attractive on weakness over the next couple weeks

Early gains this morning have moderated a bit, which has less to do with political reasons & more to do with just 5 out of 6 days of gains reaching resistance for ^SPX0.72%  near 6021 and some evidence this morning of both US Dollar as well as TNX starting to stabilize. Still a very good day for Equal-weighted S&P 500, which is up nearly +0.92%, but most concentrating on QQQ note that QQQ1.59%  is up just +0.11%. Today's gains are largely defensive, with REITS, Utilities, and Healthcare leading all greater than 1%, while Energy is the big laggard, with Crude declining nearly 2% on the day. For now, no evidence of a reversal which was thought possible this week technically, but this would be more on the radar on SPX decline under 5963

Today marks a solid day for Breadth again this week and SPX has rallied to within striking distance of Jan 6 highs. A couple important short-term developments as the Wave structure has gotten better based on today's move above 5965. While this doesn't signal a move straight back to new highs, it does signal that 1/13 lows likely won't be undercut right away. Thus, there is some short-term resistance into today/Monday near 6021. However, next week's pullback likely should only retrace 50% or so of the rally this week before turning back higher in stronger fashion. Thus, it's right to expect that despite some likely consolidation next week that prices did in fact bottom on 1/13 and are en route back to new all-time highs eventually. As shown below, there hasn't been structural change to the trend. However, sentiment had gotten worse into recent days, while breadth has proven much better this week. Overall, it's right to be bullish into mid-February, but expect some stalling out in all likelihood that could begin Monday, taking SPX down to 5900-5925 before turning up and moving to new highs into late January/early February

AAPL-0.29%  decline today is a minor negative given its weight within ^SPX0.72%  and QQQ1.59%  and as daily charts show, the stock is set to make the lowest daily close since mid-November. Given AAPL's importance within SPX, this stock remains important to concentrate on, and will need to stabilize before being able to suggest that a move back to new highs is imminent. Under 230 might very well lead to 220 in short run, but would be a very attractive risk/reward on any further weakness that undercuts 225 and will be right to watch for signs of bottoming.