The dollar weakness lately has been almost universally trumpeted as a sign of things to come...and soon. Everyone is bearish on the dollar. The numbers I've seen suggest only 3% dollar bulls and 97% bears. The boat doesn't get loaded to one side more than this. So what gives...because something has to.

For that I turn to the charts. With the latest bout of weakness, the dollar has now formed a falling wedge pattern on a daily chart. Use the low in June, the low in August and then today as your bottom trend line. I realize today may not have contacted the line, but that's fine.

Now use any of the highs AFTER the June low.  Make sure you run it through the August and September highs. See the wedge? Why is that important? A falling wedge is BULLISH. It indicates a potential reversal.

Also, along with the lower price lows in the dollar, we've been getting "higher lows" from a number of indicators, meaning a positive divergence is in play. This is exactly the type of divergence you would look for to spot trend reversals.

So what does it mean? Perhaps, just perhaps the dollar is getting ready to surprise the majority by reversing higher. This would have the effect of hitting stocks and commodities, including gold.

But there's room for this to go a bit further if the dollar wants to "throw over" the bottom trend line, and things are lined up nicely for this possibility.

It would look like this...the dollar goes lower in a "throw over" move, then reverses. Stocks charge higher at the same time towards 1060, the 38% retracement level from the November low, then reverse. Gold also charges higher to test the all time highs and then reverses. This is a VERY plausible scenario to be aware of.

If it happens, it should be in the next few days. As always, let price have the final say.