Earlier this month I showed the inverse relationship between the US Dollar and the S&P500 in this post.  Here was my final comment from that post:

Every time there a new low is made in the US dollar, the S&P500 prints a new high.  This is significant because if the dollar bottoms and rallies, this could end the current stock market rally.

Let’s get an update on the Dollar.

The blue arrow (at the bottom of the chart) is the day I wrote about the Dollar.  As you can see the Dollar broke the 50 day moving average and took off.  It looks like there is some resistance here at the $78 level.  Friday’s daily close was a doji bar, which could signify that the Dollar might rest here.  Maybe we will get some sideways movement into the end of the year.

Now, let’s look at the S&P500.

The S&P500 is still range bound as I explained in this earlier post.  In that post I gave support and resistance levels.

The S&P500 has been vacillating in channel from about 1,080 to 1,120 for the last month.  The 50 day moving average (rising blue trend line) is still intact, which is bullish.  This index could break out of this channel sometime soon.  The key points to watch are: 1,119.13 to the upside and 1,083.74.

Those levels are still intact, but I would mention that the 50 day moving average (1,088)will be major support for the bottom of the channel.

Finally, let’s look at (AAPL: 258.77 +6.60).

(AAPL: 258.77 +6.60) is below the 50 day moving average (~$197) and looks to be in a triangle pattern.  Key points to watch are $197.13 and $190.  If the stock breaks $197.13 to the upside and holds it for three days that would be very bullish.  If the stock breaks $190 to the downside and holds it for three days that would be continuation of the recent bearish behavior.  It should also be noted that Apple has an RSI of 48.  More than half the market is outperforming this stock right now.

If you step back and look at the big picture (AAPL: 258.77 +6.60) might have put in a double top at the $208 level.  The first top was in mid October and the second top was in mid November.  Remember, (AAPL: 258.77 +6.60) was one of the leading stocks in this market and that is why we need to keeps tabs on the stock.  If the leaders start to fail, it will only be a matter of time before the rest of the market follows.

Happy hunting!