From Gold Scents:
For my call of a new bear market to remain valid, one very important assumption has to be true. That assumption is that the dollar put in its three-year cycle low in May. If that assumption is wrong and the dollar's three-year cycle low still lies ahead then most asset classes should still have one more leg up to at least marginal new highs.
My assumption that May marked a major cycle bottom was based on:
1. Sentiment had reached multiyear extremes.
2. The May low occurred right in the middle of the normal timing for that major cycle bottom.
3. And QE2 was scheduled to end shortly thereafter.
When QE1 ended last year, the deflationary pressures slammed back down on the stock market and economy. There didn't seem to be any reason to expect something different this time (unless quantitative easing really isn't ending).
The next couple weeks are going to be important...
More on the U.S. dollar: