The KBW Banking Index (BKX) has now dropped below all three key moving averages and there is the potential for the 50-day EMA to drop below the 200-day EMA, which would present a more negative tone to this key component of the US equity market.

There has been a notable inability by several US indices to penetrate (so far) their 200-week EMA's.

The euro is well supported at $1.4850 and even more so at $1.48, but should the lower of those levels fail, the tide could begin to turn tide for the US dollar with all of the associated risks to equities.

Clive Corcoran writes that there are certainly reasonable prospects for a selloff in the US market today, but stresses that the real focus will be on the FX markets.

Ben Bernanke’s remarks in his speech at the Economic Club of New York about a strong dollar policy, without any specific promise to support the currency, appear to have left doubts that this stated policy is sincerely held.

It is quite remarkable how simple the pattern for the Nasdaq Composite (IXIC)has been since the March low. Whenever the index has tagged the 50-day EMA, buying support has emerged to take the index higher.

The consequences for asset allocators of a decisive shift towards a more positive sentiment for the US dollar should not, in Clive Corcoran's view, be under-estimated.

IWM, the exchange traded fund which tracks the Russell 2000, continues to register formations which are not reassuring for the bullish argument.

Clive Corcoran writes that evidence that US equities may be about to top out would probably surface with respect to the Nasdaq Composite (IXIC) index before they become obvious on the intraday S&P 500 charts.

The DJIA closed at a 13-month high but the volume across the US equities spectrum was on the light side. Other indices still have to show that they can take out the mid-October highs.