The January Barometer to Date

US Dollar Long Term Chart with Commitments of Traders

The theme for this year, besides a collapsing credit bubble, will be the contest for the reserve currency to the world. The dollar currently wears the crown, but is looking a bit haggard after years of rough trade.

The euro, while looking like a perky runner up candidate at times, is failing the talent contest. The Swiss franc was nicked for soliciting to perform inflatio and was disqualified from the hard currency club on grounds of capital turpitude.

The yen is the dollar's homely BFF so its a local favorite primarily with mom and dad. Everyone knows the Renminbi moves in a very exclusive and private circle of admirers, preferring not to leave the house, much less wear a revealing bikini for the judges.

Hence the advance of that purest of beauties, gold.

SP Futures Hourly Chart at 3:30 PM

All scenarios are still on the table.

Trendline has moderated a bit, making a more symmetrical triangle pattern that has not yet resolved either way. Guilty until proven innocent.

Keep one eye on the VIX. There is a choppy tension on the tape.

A good indicator of stock market price dislocations is often referred to by traders as "tension on the tape." What they are actually referring to is a type of volatility that moves the market in rapid intraday extremes or very tight trading ranges. As we have seen recently, the market can open up or down 50-100 points or more and then seemingly reverse instantly to the same extent.

Big data out next week with an FOMC meeting (jawbone opportunity), Chicago PMI, and Q4 Advance GDP on Friday. The figures are always revised and economists expect -5.2% so be wary of a 'better-than-expected' print.