The QQQQ's, the dollar and VIX still testing some favorite numbers as gold and oil remain poised to rise or fall

The QQQQ's gyrated just above the $39.82 level today, first weakening off then up, then down right to it again before rebounding in the afternoon. (The QQQQ hourly chart is below.) Meanwhile the VIX tested right down to the next trendline that I had spec-'d out onto the daily chart (at right). It closed at its low, 24.89 (just slightly above the 24.78 I've mentioned so often in the past).

And the dollar which we're watching closely continued to test the 77.92 Fib line that's become a pivot, lingering just under it most of the day but remaining inside yesterday's big drop down. It doesn't look to me like it qualifies for a harami candlestick because it remained in the lower range of yesterday's candlestick, but the reason why this is still a positive is because it's so close by the pivot. I mentioned yesterday that we wouldn't likely see any verification until Wednesday at the earliest whether the dollar would turn up and make this pivot level a support line. And that does remain the case.

As high as both gold and oil spiked the last several days, they still are not a relative new swing highs, even though the dollar is at lower lows. Instead it was sectors like banking, and even biotech (after only a short small consolidation) that did well today. It's in the eye of the beholder whether oil and gold are overbought, or just showing good technical confirmation for the bullish case. Once again leading me to point to the dollar and the VIX. This picture has continued to tighten for many weeks now. For a moment it looked like it would break out of this convergence of factors with the dollar tanking and equities, gold and oil skyrocketing, but all that did happen was that the picture has continued to tighten together, with equities testing the key Nasdaq level represented by the QQQQ's at 39.82 and the SPX having mounted 990 now doing its best to stay in the game for 1012/1014. As well as the VIX remaining above 24/24.78.

Individually there are games to play for the individual sectors and items. For the whole big picture, we're continuing to see the lines being drawn more tightly on where the inflation vs. deflation picture is going. There remain some who continue to sound the deflation alarms, and others who point to a great (inflationary) bullish wave in progress. While I've explained that under 77.92 is a level at 73.58 that the dollar could also seek, I do believe that this 77.92 level makes a lot of sense to use as part of this big test. Certainly, if the dollar fails the 77.92 level, then even if it tests lower to 73.58 that would represent a great excuse for oil, gold, the euro, and probably equities to seek higher levels.

Of course one scenario is that the dollar consolidates or pulls up, with equities pulling back, and then only later we see the further levels being moved toward. The deal is, if you are looking for likely turning points, then these levels that came front and center yesterday and being tested again today are great ones to use as pivots for that.

(click any image to see it larger or more clearly)