Spaceship launch at night, low-angle perspective. The elements of this image furnished by NASA.

Stocks finished the day higher, with the S&P 500 climbing 36 bps. The index did nothing all day. The sellers couldn’t get anything going early in the day, and the buyers failed to rally the market into the close.

Surprisingly, the dollar has rallied materially over the last few days, and equities have brushed it aside. Since the beginning of the year, the S&P 500 has moved opposite the dollar index. At least for the past couple of days, that relationship has broken down.

The chart below shows the dollar index inverted (upside down). It indicates that when the dollar strengthens, it negatively impacts equity prices. The dollar has recently made a new high (low in the chart), suggesting lower stock prices.

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TIP / QQQ

Also, today, we saw our old friend, the TIP ETF, start to move lower again. Despite the move down, the QQQ ETF rallied. We have seen these divergences often, and they typically resolve with the QQQ “catching” down to the TIP ETF. I think the same will happen again this time.

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2- Yr Treasury

I had thought rates broke out last week, but it turned out to be a head fake for the moment. Rates appear to be setting up to break out again this week. The 2-year rate climbed almost 15 bps today, following those very hawkish Fed minutes. The 2-year needs to clear 3% to get moving to the upside.

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Freeport (FCX)

Freeport got as low as $26.20 today and pretty much to where I thought it might go. I think this looks oversold at this point.

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SNAP (SNAP)

SNAP is trying to form an inverse Head And Shoulders pattern with a bullish divergence on the RSI. That colossal gap still needs to be filled at $22.50. It seems like this is one that is worth keeping an eye on at this point.

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Lam (LRCX)

The gap in Lam Research is filled at around $375. The problem for Lam is that there are gaps much lower on this one too. Semis have been a leading indicator for the market for some time, so what happens here with Lam may be an indication about what happens with the rest of the stock market does.

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