THE US DOLLAR IS STRENGTHENING. CAN STOCKS HOLD OUT?

I saw the title in a quote today and had to take notice. I have been a little on the bearish tone here as of late and I am beginning to wonder if it is true or not by looking at the SPY. Click on this chart and you will see that there are a few things I want to point out.

1. The stochastic is in OVERBOUGHT area as noticed by the yellow circle.


2. There is a downward slope for the past month or so as noted by the red line.


3. There is a negative divergence as noted by the rise in price, but a drop in trading volume as noted by the different directions of the yellow lines. Price is going up and trading volume is dropping. NOT a good sign. These are signs that the market may be heading lower for a little while. In response to this, I created a bear call spread today. Meaning, I sold a near the money call and bought an out of the money call. Since the current price is near $151, I sold a July $153 call and bought a July $155 call at a credit of $1 for 30 contracts. So if the market stays below $153 in two weeks, I get to keep the $3,000 ($1 for 30 contracts and each contract has 100 shares 1 x 30 x 100 = 3,000).

Watch ACTU closely. It is coming back down to "support" after the breakout from a cup with handle.

I cleared out a few stocks today:

SOLD: FLIR for a 10% profit.

BOUGHT: PAC and JADE. PAC is breaking out above previous highs on higher than average trading volume. JADE is breaking out of a symmetrical triangle on higher than average trading volume.

If I could only trade the GBP/CAD I would sell the pair since I received a signal on my chart using 3 indicators. The reason I can sell the pair is that by forex dealer doesn't trade the pair. I need to pick a new dealer for forex.

GOOD LUCK TRADING.
JD