Next targets above are the 1335ish level where wave [i] equals wave [v]. However, I do not expect the rally to end there. I think it'll hit 1350-70 before the bears get there next chance again. Important support still is at 1260-75. If we decline below that, I think, we'll revisit the 1220ish area again.
As per my observation the Dollar usually bottoms three weeks before the market tops.
There is a potential USD bottom at 77 / EUR/USD top at 1.3850. Confirmation that the bottom/top is in we get on a daily close above 78.50/below 1.35. So if we get the confirmation expect a stock market top late February.
The EUR/USD declined a bit further than I expected, we're getting the bounce towards 1.37ish now though:
As said before, the start looks promising for the bears but we learned last week that one should go short only after the downtrend is confirmed and not before. ; ) So, watch for a convincing break of 1.35ish.
The Dollar Index may be forming the right shoulder of a big inverse H&S. Watch for a breach of the neckline at 78.5.
