Here I have 2 charts, the first being the USD index DXY0 and the second being the TLT US treasuries ETF. Both charts are on the verge of a breakout which could have severe bearish risk off implications. Ignoring these signs would be dangerous. If they breakout and hold, I suggest getting into cash until things calm down. A breakout and failure to hold above resistance with price coming back into the range would be bullish.
Update: (23/5/2012)
P.S. I am still watching the USD along with the US treasuries closely. If we get a crisis in Europe we are probably going to get a run on banks. This money will most probably be stored where? Yeah that's right in the in US treasuries and the German Bund (TLT, BUNL).
P.S.S. Despite the mass media talking about the market being at an extreme, the TLT and the DXY0 are at the tip of the iceberg. A breakout above their respective levels could just be the beginning. A pause below resistance however is possible and could happen really soon in order to fuel the breakout.
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