U.S. Dollar Update

While the U.S. dollar (ETF) has rallied since late December of 2009, its continues to display a growing list of technical non-confirmations.

1. The November and December swing highs were generated on 13 million plus shares traded. The January 27 2010 breakout was achieved on 8 million shares. This implies a decrease in energy behind the tape. A breakout to new relative highs on shrinking volume produces a false or unconfirmed breakout. False breakouts tend to be reversed over time.
2. The relative breakout has also produced a momentum divergence. That is, the price high have not been matched by new highs in momentum (MOVB).

Technical non-confirmations often lead trend changes, but the lead times almost always test one's patience.

U.S. Dollar Index ETF (UUP)