The Euro is still leading and I believe it is leading the market, commodities are following and soon I expect the $USD will follow which will force the market higher.
The positive divergence that has been in place in the Euro is actually quite large, this looks like a lot more than just a bounce or correction as you hear the media saying we are due for. The difference this far is the Euro is now responding to the divergence.
The negative $USD divergence, this is about the same size/same place, the $USD has't responded as much to the divergence
YET... However commodities are already discounting it.
Euro above the SPX, this isn't a normal relationship, it shouldn't be long before the SPX moves up to the Euro. Watch for $USD weakness.
Commodities this morning vs the SPX, like I said, they are already discounting the weaker dollar which is good for the market.
The basic trend we have been following this week with volatility/noise on either side of the m.a., but I think it will turn up and rather sharply as the $USD turns down. Some risk assets are already discounting the move, commodities being one.
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