Going into the open, we can see the parallels between trade in the U.S. dollar (vs. euro; top chart) and trade in the ES futures (bottom chart). Note, however, that we're making new dollar highs early this morning, but still trying to hold at the Monday highs in stocks. As long as the USD is rising, taking traders out of the pro-risk carry trade, I'm reluctant to buy stocks for more than sharp, brief, short-covering rallies. Note, too, that we're heading toward a Fed announcement tomorrow afternoon, which may lead to greater restraint in trading than we've seen in recent days.
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