A quiet day today digesting yesterday’s gains while everyone looks up and stares at the big gap level in the SPY. I would imagine that we are going to need much better volume than we have been seeing lately to make it through that gap successfully. 110.31 is the official high from 10/21 but I keep seeing people throw 110 around. We made it through the “gap “on QQQQ a while back but keep an eye on 44 it would be a new 2009 high.

The dollar continues to be the driving force in the market, after the news on UUP last week I took it off of my screen because it had become disconnected from the market. It looks like the dust may have settled and it may be a useful indicator again. The all time low on UUP was 21.92 reached during the week of March 7th 2008. Today’s low on the UUP was 22.25 so we are getting close to all time lows in this product. The dollar index ($DXY) has been around longer than the UUP and may be a better indicator. As far as I can tell the all time low there was during the week of 3/21/2008 and got down to 70.70, it closed today at 74.95 two pennies off of the 2009 low.

I hate to keep harping on this dollar trade, everyone knows about it at this point and it is redundant, but I geuss that is my point. The market is laser focused on this trade and at some point it is going to stop working. When it does there could be fireworks and I don't want to get blownup. Also as am American I am not happy about this devalued dollar and worry about inflation.

As you know I have been suspicious of this rally so with that in mind my best trade today was a long, LIFE 50 and all of my ideas for tomorrow are longs. Just bear in mind that CMG & CRM are tough stocks and you should reduce your size in these names.

acl 149 530
aet 30 7.4
cmg 90 616
crm 65 1.9
ge 16 109
hsp 48 970
sy 41 1.2