Headline Alert
Market Mover: It’s the Dollar (Again)
Stocks continue lower today and while there has been some negative inputs from the economic calendar, the real key to the decline is the pop in the dollar.
A peek at the chart below really says it all as the dollar has broke out of a downtrend and has “entered the gap” that was created back on September 4th.
PowerShares US Dollar:
The move higher has undoubtedly triggered stop loss levels and is causing problems for the dollar-carry-trade crowd as well. Thus we are once again seeing buying in the dollar and selling of “risk assets” such as stocks, commodities, and emerging markets.
While trades like this one can take on a life of their own, we’ll point out that the dollar is now very overbought and a pullback would be logical in the near future.
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