Planet Wealth

The market opened a little lower this morning, following the pullback from Thursday.  Many are blaming Dell's poor earnings report after last night's close.  A more likely culprit is the dollar.  It's still all about the dollar and the dollar was very strong overnight.  If you look at a chart of the $DXY, you will see the big spike higher today.  Nothing goes straight up or straight down, the dollar included.  There has been no fundamental change in monetary policy (ie: the Fed talking about raising rates anytime soon) so it would be a stretch to call this move higher anything more than a bounce.  Until this correlation with the dollar changes, it will be tough for the market to move higher when the dollar is higher.

Last night the market was able to close above the 10 day mva, however in early trade today it is trading below that level.  We will continue to watch the important levels, 1100 and the 10 day moving average before placing new trades. 

One of my technical indicators was showing the market was a bit overbought on the break above 1100, so it may just be that the market needed to step back a bit, rest and then make a more definitive break above resistance.  In the mean time however, it is important to respect that 50% retracement level (1121) since the shorts are not giving up easily!