The Dollar failed to breakout to the downside. When such a clear pattern fails, it usually means the opposite directional move will be much stronger than one might expect. It is early to be getting long the Dollar, but we now have to consider that all of the action since May could be part of a (B) wave triangle that will extend for weeks before wave (C) up follows. The other option is that the entire pattern this year's low is a very large bearish triangle. Either way, it may be awhile before a clear trend merges.
The impact on equities and precious metals is anyone's guess. Eventually, a positive correlation between the Dollar and equities is likely to develop. Perhaps this sideways action is part of the correlation reversal.
Today's selloff in stocks was hardly a surprise as the market had definitely become overbought, but it is too early to say the bear has returned. I sold MAKO and IWM on yesterday's surge, but I am still holding two other short term positions. The High Low Logic index is falling hard which indicates buying interest. This occurred in late 2008 and into March 2009. It doesn't mean the bottom is in, but it may very well mean the downside is limited.
Again, I am not too interested in the short side right now. I will be looking for another bite on the long side if conditions warrant, but caution is the key word for the time being.