This dollar weakness will prolly zap my spending power in Prada!
Money it's a crime
Share it fairly but don't take a slice of my pie
Money so they say
Is the root of all evil today
The morning stray continues its way and the dollar seems intent on finding a monopoly peg. Indeed, the slide through dollar/yen 110 (look, it rhymes!) triggered "sell stops" and we're now trading firmly through that level (109.76). It's still entirely possible that an intervention stops the slop but, as it stands, it's dominating the trading chatter.
An early check of the morning breadth has losers tagging winners 2:1 on the big board and 3:2 in techland. The semis stand out (they're trading rather dry) and that, as much as anything, is leading to an N's over S's flava. Along those lines, the aforementioned gaps are still in play as the S's edge under S&P 1030 and the N's peer down at its comparable level (NDX 1362).
Despite the dollar drudge and iffy internals, this session is far from over. The retailers, biotechs and semis all trade relatively dry and if (big if) there is snappage in the greenback, the tape should itself get some green back. I haven't really seen any monster flow either way but my sense is that some fresh shorts were tossed on the sheets this morning. Walk tall....but carry that stick in your right hand.
For my part, I'm playing from the short side with uber-tight stops in my trading positions. If the dollar snaps back (my catalyst), internals improve or leadership emerges from the financials, I'll likely move to the sideline. The sticky green SOX are tempering Boo's bent a bit but I wanna see how this one shakes out.
As always, I hope this finds you with some jingle in those jeans.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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