If we look at the global situation, it is highly probable that DXY has found its bottom and might be heading higher. Theoretically, it has already created a higher LOW which might now lead to a "fight" for a higher HIGH. The increasing power of US dollar is also visible when looking at other indices, which are slowly losing ground.
The daily chart shows that we were able to break the trendline to the upside and create a new HIGH. This trendline was in essence the last option for triangle to be formed. But right now, it is very possible that we are going to "attack" values of 94.31 - 94.75, where we might be slowly forming a double top. If we however break this trendline it is possible that the stock markets might be heading into correction.
When looking at S&P 500, we see nothing new. To be honest, it again looks completely the same with the slight rise of the levels inside the channel. Even if any correction comes, it is possible that it will jump back from the trendline and quickly rise back to the previous levels. This is an ongoing "battle" which has been visible for almost 9 months. We might even say, that this is a situation, to which we are now accustomed, however, it might be a bit dangerous. If DXY shows strength, I would really consider an option of S&P 500 going into correction. Even the situation now looks a bit on the edge. In my view, I thought that the correction would come during the summer time, but we are not witnessing any of that yet. The red flags are however increasing in numbers, which should lead to more caution by traders.
The fact that correction might come is at this stage only a fear or a theory. However, if the trendline on S&P 500 breaks down, the fall can be really fast and harmful. The red flags are increasing in numbers for now, and DXY is one of them. Yet, if the trendline holds, we should be fine for the short term future.