U.S. Dollar

The dollar rally is beginning to raise some notable red flags.

• The move above the swing high occurred on shrinking volume. This is a false breakout.


• While the dollar has moved at a relative new high, the move has not been confirmed by either cumulative volume or momentum. As long as price remains unconfirmed, it creates a bearish condition known as a negative divergence.


• COT money flows reveal commercial traders adding to their significant short position.

While you should never argue with direction of the tape, this does not mean that its quality should not be challenged.

US Dollar Index ETF (UUP):