UUP is sitting at a key level for last couple weeks. While there is a case to me made that its potentially forming a H&S pattern with more downside, I personally think that pattern will fail and we may have some near term bounce atleast to the trendline or maybe until the 200sma. This would coincide with $81-$82 level on US Dollar index. Fiscal cliff agreement didn't really get as much austerity measures as I was expecting, but revenue increases for sure should be bullish for the currency. [Any Forex traders want to comment on this?]
If we do break the support level at 21.60 on UUP, think the markets will have nice rally. Dollar moving up is generally bearish for the market, so you may want to keep that in mind when trading the markets. This is the only thing keeping me full on bullish on the market. All the other indicators look to be lining up pretty well for nice Q1 run.
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