Two very significant technical breakouts could be approaching at the moment that will confirm a near-term top in the Euro/Dollar and an intermediate-term bottom in the cash S&P 500.

As we speak (Wednesday, May 7) the Euro/$ is pressing towards a test of key support at 1.5360/40, while the cash SPX appears to be poised to thrust above its 7-month resistance line in the vicinity of 1421. Should these breaks occur, the Euro points to 1.5000 next, while the SPX points to 1460.

A respite in surging oil prices would certainly help the S&P, but once again the US Oil Fund (USO) has surged towards a confrontation with its upper channel resistance line in the vicinity of 99.50. Classic technical behavior would call for the price structure to thrust 1-2% above the channel line (101.00 to 102.50) prior to pivoting to the downside in a very powerful negative reversal.

Certainly, the technical conditions are ripe for such a trend changing signal. However, so far we have no evidence of price deterioration. Only a decline in the USO beneath 98.70 will begin to compromise the juggernaut known as rising oil prices. A break beneath 98.00 in the US will add a measure of confirmation to my near-term technical sell signals.

I am, however, anticipating the establishment of a meaningful top in the U.S. Natural Gas Fund ETF (AMEX: UNG) in the vicinity of 53.00-55.00 in the upcoming days/weeks. Both my pattern and momentum work indicate that such a top is in development at this time, but that does not preclude the UNG from climbing to marginal new highs above 55.06 during the process.