USDJPY reached our target at the SMA100/SMA200 overnight, at least temporarily bringing the pair back below the top of the falling white channel from which it broke out on July 10.  Readers will recall that breakout was instrumental in helping SPX break above its faux IH&S neckline 66 points ago.

A USDJPY rebound here is all stocks might need to make new highs.  EURUSD, which is backtesting after a major channel breakdown, would certainly support a strengthening of the USD……as would DXY — which is the latest victim of “unpresidented” tweets.

As central bankers have recently discovered, however, there are complications from continued dollar strength which would suggest that it will take a break here.  Will they heed those warnings, or are new all-time highs in equity markets more important?

continued for members…

Since USDJPY is about to go on a market-ramping tear to 113.59, what about RB and CL?  Would we finally see the actual SMA200 tags…

…or has RB already left the station?VIX remains in prime position to do “whatever it takes” to get ES/SPX over the hump.SPX is oh so close……as is ES — which curiously saw its rising white channel break down — but, only after busting the potential H&S (purple neckline.)EIA’s most recent inventory report was “the weakest in years” according to oilprice.com, which also cites Standard Chartered’s bull-bear index as being at the weakest point in the past five years.

While we’ve touched on CPI issues in the States, things are much worse practically everywhere else thanks to the USD’s strength.

Oil producing countries might consider strong oil and gas prices a blessing.  But, for everyone else, they are a curse made all the worse by the dollar’s continuing strength.  At some point, the “global recovery” story will stop resonating with investors.

I have a number of meetings out of the office this afternoon, so will sign off for now.

GLTA.