Markets are in a no man’s land where these levels could either hold on the upside or roll over, Roger Hirst said during today’s Real Vision Daily Briefing.

Hirst said it is difficult to predict where we go from here because the historical resistance levels for the rallies off the March lows keep getting steamrolled by QE. If the S&P reaches the 62% retracement level soon, it may or may not turn out to be relevant.

“It’s still a good point to think about putting some shorts out, but with very tight stops because there’s potentially more fiscal and more monetary coming in the not too distant future,” Hirst said.

Hirst also discussed the steepening of the yield curve during today’s briefing, which he believes has to do with the anticipation of additional fiscal stimulus on the way regardless of who wins the election. The question now is what the market’s tolerance for higher yields will be, Hirst said.

Hirst said there’s a point where markets will become uncomfortable with higher yields so if yields start to move aggressively, he expects that the Fed will come in and do yield curve control.

Moving on to the topic of what’s happening in the currency markets, Hirst stated the current conundrum: everybody wants their currency weaker and everybody wants the dollar weaker and you can’t have both.

He also said that as U.S. inflation is picking up, Europe’s is beginning to decline and that’s a big problem. He thinks that if the euro starts looking like a deflationary currency, the ECB will fight it.

Looking at the DXY, Hirst noted that nearly all of the move down in the dollar was due to the euro getting stronger and not actual dollar weakness. His feeling on the dollar is that moves to the downside will be a grind because if the dollar goes down, European and Japanese policymakers will get agitated and react, so it will move down a bit and then move back a bit, he said.

Hirst said there’s always an asymmetric risk to the upside for the dollar because of the potential for the risk-off scenario where the world realizes there’s an insolvency risk and a cash flow risk in a world that is still dollar-denominated cash flow.

Going forward, Hirst said he will be watching the bond market, because if it starts getting volatile with the steepening of the curve, that will eventually make its way into other assets.