Looking for Clues

Samuel Gerard: "Newman, what are you doing?"
Noah Newman: "I'm thinking."
Samual Gerard: "Well, think me up a cup of coffee and a chocalate donut with some of those little sprinkles on top, while you're thinking."
--The Fugitive

Since making a ton of sales a couple of weeks ago in the pharma names, I've pretty much unplugged from granular tick watching for the time being. Relative to overall assets, my financial market risk profile is as flat as it's been for quite some time, consisting of 2% stocks (residual pharma exposure), 2% currency (long the dollar), and 2% short (token S&P index short).

I can't help but wonder whether growing strength in the USD portends a downside resolution to the sideways tape action. An awful lot of folks have the dollar carry trade on, meaning that they're short dollars and long risky assets of all shapes. If (big if) those folks decide to take risk off and cover their dollar shorts before year end, then we could be looking at the mirror image opposite of the fabled 'Santa Claus' rally.

One would 'think' the technical action in the dollar, which finds it trying to reverse a multi-month downtrend, is an early step in this direction.

Am not acting on this idea currently, but trying to stay alert for clues that further validates (or invalidates) such a scenario unfolding.

position in S&P, USD