DOLLAR RALLY COULD GIVE A BOOST TO STOCKS
JUMPS 1% AGAINST EURO -- GOLD DOWN... The U.S. dollar staged an impressive overnight bounce against the Euro and the yen. It jumped 1% against the Euro and hit a two-week high against the yen. This doesn't change the long-term downtrend in the dollar (which recently hit a four-year low), but does suggest that an oversold bounce is starting. That doesn't surprise us too much given the selloff in gold prices recently. [Gold and the dollar normally trend in opposite direction]. The selloff in gold has been hinting at a dollar bounce. Gold is down again today.
EUROPE BOUNCE SHOULD HELP U.S. STOCKS... European stocks are trading sharply higher this morning -- which should also give a lift to our market at the start of trading. Yesterday's late stock rebound came on the heaviest volume in six weeks -- and also occurred from areas of chart support near the October lows. Today's dollar rebound could give another boost to the stock market.
BONDS DUE FOR SOME PROFIT-TAKING... Bond yields are also near their October lows -- a likely area for some bond profit-taking to occur. We'll take a closer look at the current intermarket picture later in the day.
