Chart Courtesy of StockCharts.com

The U.S. Dollar continues to gain strength and the Powershares U.S. Dollar Bull ETF (NYSE: UUP) has crossed above its 200-day moving average.



Chart Courtesy of StockCharts.com



The markets are fixated on the action in the S & P 500. And we agree that it is significant. Yet, a more important trend may be reversing in the U.S. Dollar as a multi-year down trend in the greenback may have started to reverse.

The 200-day moving average is the line between bull and bear markets, and the dollar is now technically in a bull market. To be sure, it's early in the game, and things could change, especially on Friday if the employment numbers are not dollar friendly.

Yet, the dollar has a lot going for it. For one thing, Europe has three countries, Spain, Portugal, and Greece, that are in deep fiscal trouble. Japan is also increasingly weak and vulnerable economically. And the U.S. economy, barring a double dip, looks to have stopped falling, or at least seems to be contracting at a slower rate.

With all the potential trouble spots in the world, and everyone hating the dollar, it seems reasonable to assume that this is the proverbial blood in the streets buying opportunity for the dollar.

The key is for the greenback to remain steady and continue to climb, even if it's a slow grind.

Dr. Duarte owns shares in UUP.

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