After yesterday's rally, the sellers returned in full force today, driving down stocks and sending the US Dollar to a fresh 12+ year high as it soared almost 1% higher against a basket of depreciating currencies. I'll get into the US Dollar and the basket of depreciating currencies later, let's look at the market, where it could be headed, and what we can do about it.
This morning started off much like a New York Jets Football off season. So much promise, so much hope, so much excitement. And then the season starts and everything just falls apart. Of course it wouldn't be a NY Jets season if they didn't win a few games at the end of the year to ensure they won't be getting a top draft pick. That sums up today's trading action. The hope of a new trading day, the reality of a pullback, and a late day rally to screw everything up.
While I am not a NY Jet fan, perhaps all the moves they make in March will lead them to the promise land this coming season, but I do know that, like almost every NY Jet season the last 46 years, the most promising of trading sessions can turn ugly in a hurry. The culprit today remains the run-away dollar. A theme I've been talking about since the start of the year.
The US Dollar stopped its relentless rally yesterday and stocks responded with one of their biggest rallies of 2015. Today the US Dollar is moving modestly higher and back to key triple digit area on the index. Bonds are pulling back, and Crude oil is rolling over like any good dog.
Here is what I am reading on the last trading day of the week:
