I can’t leave last week alone without bringing up Mario Draghi. I think the man has an impossible job, just as I believed Bernanke had a very difficult task back in 2011. Last week Draghi threw the kitchen sink at the problem as he dropped rates to zero, increased the negativity of the overnight rate and also increased asset purchases all at the same time.

Markets loved it until he said that was the end of the rate cuts. He didn’t have to say that, did he? The EUR/USD did a 180° on him, so by the time the press conference ended he had to amend his tone to say that, given new information, they could keep interest rate drops on the table (my paraphrase). Look at this Greenback chart:

One of my newer teachings is how the first leg influences the entire leg. It’s another one of those strategies out of the advanced Gann playbook. Nevertheless, in this case that first leg is 44 cents (at least it was before the continuation rolled over). As the trend progressed there were two changes of direction at 44 and 88 hours. Then we had the biggest reversal near 7200dg in terms of time from the February turn. Now they find a low at 131 hours (3*44=132). The point here is the multiple of 44 tried to bounce but couldn’t sustain.

The other point is we have a very good time pivot at the Draghi reversal the other day. A lower dollar and higher EUR/USD are not conducive to a sustainable stock market rally under the conditions we’ve seen lately. With the strong high pivot and lessening 44 influence at this low, you can see that under the hood the underlying structure of the Greenback is starting to weaken. Then, when you look at the parabolic red bars off this high, it does look like Greenback bears are serious. My problem is that I don’t see how the stock market rally can be sustained without European participation.

Right now Draghi put them in a corner with almost no wiggle room. I get it, rates are at zero. But where can he (realistically) go from there? What was he trying to do? The euro was going the right way, it’s almost as if he sabotaged it—much like Herbert Hoover sabotaged the U.S. economy when he thought he could build confidence in the business community by telling them he’d try to balance the budget in the depths of the Great Depression.

Your takeaway here is that the Greenback is vulnerable, and that doesn’t bode well for stocks right now. Whether that manifests itself this week or at the next window in May where we sell and go away, risk is now elevated and the best we can do is manage risk.

I am going to say a thing (or three) about Friday night. For the past year and a half, I’ve commented on the Starbucks consumer behavior report based on the Ferguson riot. When people see this sort of thing, they shut their wallets. I talked about this in November and December when they shut down Brussels. Eventually the markets got hit.

If you think what you saw on television Friday night is the end of it, you are kidding yourself. So I believe this kind of social and civil unrest will have implications and eventually it will hurt the sustainability of this rally—if not kill it off altogether. This is another manifestation of my 1968 view of the markets. For right now I believe they’ll continue to push higher this week as we get close to the maturity of these cycles.