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Stocks struggle as dollar continues to slide

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Stocks continue to struggle as concerns grow for the weakening U.S. dollar. Today's action has the US Dollar Index (dx00y) 107.52 -0.61% hints that the dollar may have further downside over the coming weeks to the 105.56 level and may continue to weigh on the broader market stock averages.

US Dollar Index Chart (dx00y) - Weekly Interval

On Friday, the US Dollar Index (dx00y) tried to hang around its relative lows from December 2000 at the 108.09 level, but today's action has the Dollar continuing to show weakness against a basket of market-weighted currencies. This action continues to put selling pressure on equities again today.

Treasuries are seeing some selling today across the major maturities with the benchmark 10-year Treasury YIELD ($TNX.X) rising fractionally to the 4.772% YIELD level. "Bond talk" is that some selling in the longer-end of the Treasuries is on an allocation out of bonds and into stocks as a rebalancing move.

Sectors that may be attracting some of the "rebalancing" that are showing gains are Gold/Silver (XAU.X) +2.27%, Semiconductor (SOX.X) +0.75% and Forest/Paper Products (FPP.X) +0.26%.

Jeff Bailey
Senior Market Technician
Option Investor

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