New evidence that a gold correction could be just around the corner

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This will be a brief post about what appears to me to be the issue of the day - the US Dollar. I snapped this chart of the US Dollar about an hour ago, noticing it appeared poised to break out. Since this chart was made, the US Dollar has broken reather decisively through the overhead downtrend line on price and trying very hard to get up through the 200 period moving average on this 4 hour chart.

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Meanwhile, a rising dollar is not good for the stock market, as this 4 hour chart of the Standard and Poors 500 Continuous Contract shows us. It appears that if a retest of the lows is going to happen, the True Strength Index (TSI) indicator will make a positive divergence with respect to price and I hope that means the downdrafts are done for a while.

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And finally, this look at a 4 hour chart of GOLD, which has succeeded in making a new high today. The indicators are in negative divergence, as I presumed yesterday they would be. I will be the first to admit that in very strong momentum moves these kind of negative divergences can just get run over..... ie price ignores them and continues higher. In these cases, and I have seen it happen many times, the TSI will continue to rise but only until it just about reaches its previous high. Then price collapses. I don't know exactly why this is, but I do believe my observations to be true.

I believe that Bernacke's position seems to favor gold. He basically said that interest rates will be below inflation for an extended period of time. That is incredibly bullish for gold.

My concern about gold, however, is that it has entered an unmistakable parabolic phase. These things never last long (I looked back at all previous C-wave tops and 4 days was commonly the limit - today is Day 3). My other concern is that gold is incredibly overbought while the stock market is incredibly oversold. I think big money would infinitely prefer to pile into an oversold market than an overbought market.

At any rate, my 2X short gold ETF (DZZ) I will just hold through whatever gold does next.