Medium-term

Sovereign debt is going to cause problems for the Euro and pound. The Dollar will continue to be a safe haven currency, and that will create headwinds for the stock market and PMs.

The Eurozone has severe problems -- in Greece, Ireland, and now even in Portugal and Spain. These aren't going away.

Eventually, the threat of problems with U.S. debt will catch up, should catch up, and cause problems for the U.S. dollar as well, but for now, dollar is the currency of reserve.

Long-term the dollar is shot. But for the next month or three, the dollar should rise to at least $82 (50% retrace of prior bear move). US equities could double bottom around here, or but should be weak until the dollar tops. Gold should be even weaker.

In general, I am more bullish (or less bearish) on US equities than I am on the Euro. I am more bearish on the Euro. This is mostly chart analysis -- the U.S. equities charts look SO much stronger than FXI, Euro or even GBP charts. And in the U.S. it looks as if there is a possibility of this being a three wave (ABC) correction, rather than a five wave correction. Friday's equity bounce and the hammer candlestick on the daily chart are encouraging and much stronger than the Euro.

However the Euro is VERY oversold. Typical of Wave threes. New Post on the EURUSD.