Traders lifted stocks on Monday after the dollar reversed course as volume slid on the day.  Over the weekend the vote to allow hearings on the proposed healthcare bill had sellers hitting the dollar giving a boost to stocks.  First hour of trading stocks enjoyed a boost from the dollar and a jump in existing home sales.  Excitement from the morning wore off as traders looked to tomorrow’s tsunami wave of economic news.  At the close stocks were able to fight off the lows and finish just below the mid-point of the day.

Institutional players weren’t playing ball as many are awaiting a whole host of economic news on Tuesday.  Most importantly will be a look at 3^rdquarter GDP where the street is looking for 3.2%.  In addition, Case-Shiller will release its data as well as the Richmond Federal Reserve.  Given the state of the job market it is easy to see why fund managers are unwilling to take the risk and deploy capital into the market.

The dollar continues to remain highly correlated with the stock market.  Any blip to the upside and traders get jittery.  It could be black boxes who are selling a basket of names on every tick higher, but it is clear the market moves with dollar movements.  If Congress and the White House continue to look to print money the dollar will continue its downtrend.

Volume is utterly pathetic, preliminary results show the NASDAQ volume down 8% while the NYSE volume down 16%.  It is a bit concerning price wasn’t able to close near its highs, but the lacking volume may be the reason why.  We are seeing hesitation by investors to step into the market and take risk and until this reverses I still believe we’ll enjoy wild intraday rides.

Economic conditions continue to be unable to support sustainable organic growth.  The continued open flood gate policy in terms of monetary policy will delay any hint at a sustainable recovery.  Low interest rates and lending practices led to an unsustainable growth from 2003 and led to the bear market of 2008.  If we continue to not allow the natural cycles of the market to work we’ll be stuck in neutral in terms of economic growth and prosperity.  Thus, we’ll see a market that is dominated by very few with access to cheap money.