If the dollar's in a "bull trap door" what does it mean for everything else?

Very little seems to be up today, except for the U.S. dollar and to some extent bonds. The pattern being traced out (see UUP chart at right, the ETF tracking the U.S. dollar) has the characteristics of a "trap door" which in this direction is a bullish pattern suggesting the dollar moves substantially higher. In fact, the pattern along with the volumes is even suggestive of certain trend reversal patterns. In order for this to hold, the dollar obviously needs to remain above the early June low (23.43 on the UUP chart), and preferably above Thursday's low as well. The implications for dollar-denominated asset classes tends to be bearish. Just how bearish depends on how susceptible they already are to a downward movement. If certain markets - taking oil as one example, since we've looked at oil being at resistance levels - are already facing reasons for profit-taking and weakness ahead, that weakness will dovetail with a push higher in the dollar.

Of course the euro is conversely weaker today; while the yen as Tony Caldaro remarked over the weekend is in consolidation mode - looks higher today, and it will be interesting to see which path the yen takes. For myself, I'm taking the yen as an exercise in interesting analytics, while my trading position is more directly to be selling the euro so long as this bullish dollar play is working. From the look of the markets, selling across a variety of indices, as well as gold, may also be the order of the day, and we'll have to see how long that remains the case if the dollar goes into a serious rally mode.