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Stocks gapped higher this morning, but have been fading as the session has developed thus far. The Nasdaq is in the red, and virtually all of the gains in the S&P 500 have been erased. Underneath the surface, stocks are mixed, although I am seeing plenty of red on my watchlist. From an intermediate-term perspective, we are still basing along in a neutral manner on the major indices, after the Thanksgiving sell-off and subsequent V-shaped bounce.
The issue today appears to be the pressure that the weak Euro and strong Dollar are placing on equities, as well as gold and other perceived sources of liquidity and risk. As you can see below, the Euro/Dollar cross is breaking down to levels not seen since last January. Moreover, the UUP, ETF for the Dollar, is threatening a major breakout.
At the end of the day, I am stock trader who is focused on the price action in stocks. However, when correlations appear to matter this much, I am going to pay attention.
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MACRO : America is in as worse shape and the stupid Euro trash.
Go KING DOLLAH !