This is an abridged version of our Daily Report.
A new day for the dollar
The U.S. dollar has closed above its long-term average for the first time in a year. Other times it ended a long streak in a downtrend, it continued to rally in the shorter-term.
Its attempts at a new trend led to horrid returns in gold and oil, while Utilities and Health Care held up best.
A slow rise isn’t good enough
Newsletter writers keep getting less optimistic about stocks, despite a steady market. Their optimism has hit a 52-week low in 3 out of 4 weeks, despite the S&P 500 holding well above its own low. The other times there was such a divergence, stocks rallied consistently over the next 6-12 months.
Staples are trading like death, and more of them slid to a 52-week low on Wednesday. More than 30% of stocks in the sector hit a new low, the most in nearly three years. According to the Backtest Engine, that has led to a rebound over the next month 81% of the time.
Worse than Staples
The only fund that has more pessimism than XLP over the past 10 days is VNM, the VanEck Vectors Vietnam ETF. Its 10-day average Optimism Index has dropped below 20 for the first time since 2015.
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The post titled New Dollar Trend As Newsletters Keep Selling was originally published as on SentimenTrader.com on 2018-05-03.
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