Dollar rally? Watch precious metals

The past few weeks has seen the dollar rise as stocks and Treasury yields moved higher. However, recently the dollar appreciated even though equities and Treasury yield moved lower. Many traders and investors will now be bullish on the dollar based on its strengthening in a pessimistic and optimistic market. Even PIMCO, one of the world's largest bond holders and asset management companies, is now a short term bull of the dollar. Interestingly, they were bearish only 3 months ago. Maybe they want us to go long on the dollar so they can offload some of their positions? How else do the big boys offload decent size at a decent price? Nonetheless, we are technical based traders by nature and follow what price action is telling.

 If the dollar does continue to rally and there are strong reasons why (Greece may be out of the spotlight but what about Portugal, Italy, Ireland and Spain?, China has experienced a significant slowdown which has already had an effect on AUD and NZD, JPY and CHF are weakening due to its high appreciation), so where would you go for growth?

One chart that looks interesting is Platinum: The base chart is Platinum futures and the red line is the Dollar Index, you can see the inverse correlation it has. As the dollar rises, Platinum falls. What is also interesting is that we are in a head and shoulders pattern, therefore many traders will be looking for a break of the neckline to the downside at 1606.4. A potential target could be the 61.8% retracement at 1496.9 which coincides with the heigh of the head [of the head and shoulders pattern].