In addition to the market view I outlined earlier, I wanted to take a moment to graphically look at the relationship between the dollar, the 10-year Treasury note yield and the stock market.
It is very clear that the financial press is keying off the movement in the dollar for its focus on bonds and stocks because the dollar has led for the last couple months. At this stage of the game, there is a divergence developing and I am not sure whether it is a positive or negative one.
The U.S. Dollar Index is at the lower end of its range, while the 10-year note yield and the S&P 500 are closer to the upper end of their relative ranges. Either the dollar isn't the driving force anymore and stocks break out, or it remains the driving force and stocks follow the currency to the lower end of the range.
At this juncture I am not sure which way it will turn out. The one thing it does confirm is that from a broad market perspective, I would rather wait to buy "the market" when it either breaks out of the range toward the upside or gets closer to the lower end of the range.
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