Stocks fell yesterday after the European Central Bank lowered its growth forecast and the number of weekly jobless claims increased. Fed Chairman Ben Bernanke failed to indicate that any new stimulus programs were being considered, and the press reported that no innovative approach would come from the president’s address that is likely to get past Congress.

And so following the 3% bounce on Wednesday, stocks fell 1%. And the first barrier at S&P 500 1,200, which we discussed in Wednesday’s Daily Market Outlook, is intact and remains as the most immediate resistance to a general advance.

Despite some progress with the European economic crisis, a downward revision of the region’s GDP and a lack of support from the central bank’s president resulted in a rush to the U.S. dollar and gold.

The PowerShares DB US Dollar Index Bullish Fund (NYSE:UUP) gapped through its 50-day moving average last week. If the dollar can break from the trading rectangle that has been in place since May, it is possible that it could stage a successful attack on its 200-day moving average at just under $22. This is not good forU.S. stocks since for several years there has been a negative or contra relationship between the dollar and stocks.

And finally, a Bloomberg article points to the currently low short interest ratio, which is a mere 1.5 for the S&P Composite 1500. This is down from 2.4 at the end of July. High short interest is considered bullish since eventually the shorts must cover their positions with buy orders. Thus, low short interest is considered bearish.

And so, wherever we look the evidence continues to build against higher stock prices.

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.

• See Sam Collins’ Trade of the Day: Gold Miners ETF Should Continue to Shine
• See Serge Berger’s Trade of the Day: Visa Ready to Spring Higher