The Dow has been hit hard with selling, breaking through the key 11,600 support level I’ve been warning about. I said that once the Dow breaks 11,600, the bear is back in control and much lower prices are to come. That means U.S. stocks, and by default the U.S. economy, are going over the cliff. How low will it go? We need more fear in the market before a bottom comes and I see the Dow dropping to as low as 9,200 before a turnaround starts to take hold. Of course, it won't be a straight-down affair. There will be a lot of fake-out moves and with all the uncertainty out there, there will be a lot of volatility. The economic news is not good, and a lot of investors are very, very nervous, and rightfully so. What should you do? Be cautious. Stick ...

The dollar is gripping tightly to its two-week rally even though the fundamentals have changed very little. So what’s behind the market’s sentiment shift?

Less-dovish rhetoric from the Fed? That could be part of it. After the FOMC meeting last Wednesday, the Fed is now expected to stop cutting rates for the foreseeable future.

The latest economic news could also be lending a hand to the buck’s strength. For example, last Friday’s U.S. jobs report suggested the labor market may be entering recovery mode.

Still, the dollar’s about-face started before either of those events. And that’s why I attribute its recent rally to something else, something that’s been mostly swept under the rug.

I’m talking about the G7 meeting that went down near the beginning of April. It may not have been given sufficient credit by the market at …