Stocks & Commodities Get Smacked As USD Rallies

Tuesday, November 9, 2010

Stock Market Commentary:

Stocks and commodities ended lower as the US dollar continued its four day advance. Volume patterns remain healthy as the major averages are now in their 11th week of their ongoing rally. On average, market internals remain healthy evidenced by an upward sloping Advance/Decline line and the fact that new 52-week highs continue to easily outnumber new 52-week lows on both exchanges.

EU Debt Woes Send Dollar Higher:

The euro fell to a two week low versus the US dollar as concern spread that some European governments will struggle to repay their debt. This sent a slew of dollar denominated assets lower (mainly stocks and commodities). These markets are currently very extended and a pullback of some sort will do wonders to restore the health of the 11-week bull run we are in.

Market Action- Confirmed Rally, Week 11:

Heretofore, the action since this rally was confirmed on the September 1, 2010 follow-through day (FTD) has been strong but the market action has been wide-and-loose which is not a healthy sign. The next level of support for the major averages is their September highs, then their respective 50-day moving average (DMA) lines. Trade accordingly.

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