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The dollar squeezed out another gain today albeit a small one. The bigger picture is that the chart has transformed itself, maybe just for now, but it bears watching. The downward channel has been broken, and is trying for a move higher.
It’s significant because the playbook says a higher dollar is lousy for stocks and commodities specifically. For now the market is steady as she goes though. Oil hit a three month low today at the $70 per barrel level but that was overshadowed by a surprise draw down in natural gas. I don’t think a blip on the natural gas radar is anything to put to much credence in and I am more concerned with what the dollar may do going forward.
On another note the financials look beyond dead and WFC is trading down I think partly because of the confusion surrounding Citibank. WFC will be in my opinion a big winner short, huge exposure to California and they don’t have the trading clout as Citi or BAC, a huge profit center that they are missing out on.
Watch the dollar.
No names tonight, see you tomorrrow.
