The big hairy deal on Friday

is that the Dow and S&P triangles both resolved to the upside.

I watched it, did nothing. The book says to be long it here, though. If you got a little pullback to 11.7, S&P to 1290, it'd be compelling to give it a shot. I have problems buying a market that's been such a whipsaw lately when it's already up 200. Looks like you could get a move to 12.1, 12.2 on the Dow from here. Dow looks like it has a little more room to run than the S&P.

On a decade chart, the Dow 11750 level was very important support going all the way back to the 2000 - 2001 timeframe. This support level was only broken in June. Keep this in mind as a very important long-term pivot.

Other things I'm looking at are -

1 - $USD is in breakout mode, broke above its 200 DMA for the first time in 2 years. My look at the charts says 85 or 90 can't be ruled out. FXE, conversely, broke below support and its 200 DMA. That chart looks absolutely ripe to try to fill its gap, then trade from the short side.

2 - The strongest group of the week was the clothing and accessories index, up 14%.

Ignoring whatever convictions one might have about the state of the US consumer, divergence analysis likes COH here. There's a MACD, Money flow, RSI and Williams oscillator divergence, off a recognizable double-bottom at 25. Reviewing the 3 year chart, the same support level held earlier this year and back in the summer of 2006.

COH is really a clothing supplier, but if you take RTH as a retail proxy, there's a double-bottom in that chart around 85. You'd definitely want to wait for a pullback here. No one has any business buying something up 20% from a base.

APP could be a trendline break in this group.

3 - REITs. Put the Dow Jones US REIT index up on a 3-year weekly and you'll note how it held support running all the way back to the fall of 2005. URE would be the vehicle, but it's extended now. Also, the only divergence with its lows earlier this year is RSI. That's too thin for me to trade, but I find it interesting that several consumer discretionary stocks plus commercial real estate can be viewed as forming bases here.

4 - Dow Water Index up 11.78%. These stocks are a mixed bag; some are utilities (a group I don't like), some are industrial water processing companies, others are tied to housing. I'm watching the trendline break in WTR and SWWC.

I didn't do anything yesterday. I thought about taking down part of the DZZ (double-short gold) position when gold touched the H&S objective of $851 during the day. But looking at the GLD chart, it looks like it gapped down under important support and took out its 200 DMA. With the dollar and euro and general commodity action the last few weeks, I made a decision to let the position run. On Monday I'll tighten the stop on about 15% of the position.

So, my best candidate on the long side is COH on a pullback, as close to 25 as you can get it. Maybe a quick trading position in some DDM if it turns out not to be a headfake.

On the short side, I'm looking at the H&S in FRO. I missed this when it broke through the neckline at 60. I also missed another shot at it on Wednesday when it came back above 58. What you'd like to see on the short side is if it comes back to the neckline on decreasing volume. The downside measures to about 48.

I don't see any need to force anything right here. I'm watching cautiously and leaning toward taking off some of my commodity shorts. I'm weighing the deep oversold levels in gold and materials against their breach of important support and moving averages. You have to expect an oversold bounce - possibly violent - in these at some point. Stops go really tight on these, almost certainly insuring that something gets sold.