Markets fell for a 6th straight day as investors continued to take profits from prior week’s gains. Numbers have been mixed so far this week and therefore the consolidation and profit taking come as no surprise.
The dollar did indeed bounce off of support today, which accelerated stock declines towards the close. The dollar has been extremely oversold so, like we stated yesterday, expect a bit more of a pullback in stocks today- which we got- and now most stocks are at support on the 20 day moving average.
Now, the next development to watch for tomorrow is if stocks will hold the 20. If not, expect the dollar to head higher short-term and markets to consolidate for a while longer. We have stops in on some core holdings to sell half if they break the 20 and to buy them back when they come down to reasonable levels again. For example, we will be happy buyers of FCX at 35, and UPRO at 90 and 87. Here is a chart of the S&P 500 below: