The U.S. dollar bounced off its two-year low on Monday. It’s too early to determine if this rally has some staying power. The dollar’s move appears to have weakened the Mexican Peso. The peso is currently stuck in a trading range between 17.5 and 18. Right now it’s a waiting game.

I mentioned earlier that the market’s rally could be followed by an intermediate correction. However, if the market keeps surging higher and especially if it breaks through 2500 and holds this week that would be a strong signal that we completed an intermediate cycle low three weeks ago. If that’s the case then we could be entering the vertical phase of the bubble. The markets tend to put in strong performances through the end of December. I would expect the vertical phase of any stock market bubble to occur mostly during this period.

The question remains as to whether we have seen the intermediate cycle low, we should know more in a week or two.

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