Monday’s Big Tech Rally Looks Suspicious

Any market pundit will happily, sagely tell you that not every day in the market needs an explanation. Monday’s move does. Four percent rallies (intraday) are not easy to come by, even by this bull market’s standards, and with recent bullish relationships not holding in yesterday’s action, it behooves us to dive deeper into the session.

Notably absent in Monday’s big move was a concurrent drop in the dollar. The S&P and the dollar have been steadily inversely correlated since March, and dollar declines have been associated with policy efforts to loosen financial conditions. In fact, the dollar is well-bid as I update this article on Tuesday.

Investors have been hyper-focused on the possibility of fiscal stimulus since the September bottom, evidenced in large part by a quick drop in the dollar last week. To see none of that weakness as the market surged Monday was odd.

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