Dollar at 52-Week Highs as Crypto and Semiconductors Sell Off ~4.5%
John Salama, CMT
ETF Market Strategist & Derivatives Trader | CMT | Author, Physical Over Digital Alpha | Featured Author, Barchart | 500+ Institutional Subscribers
The dollar (UUP) printed a fresh 52-week high while crypto and the semiconductor complex sold off. Bitcoin and Ethereum were already under pressure following news that Jensen Huang is stepping down at Nvidia; both down approximately 4–4.5%. Semiconductors declined ~5%, led by AMD at –10%. Nvidia itself reversed yesterday’s bounce and is trading –3% on elevated volume. It remains roughly 7% of the S&P 500 and reports Tuesday after the close, with Colette Kress assuming the CEO role.
SPY trades ~752 (–0.7%). It continues to hold above its rising 200-day moving average (currently at 732), a level that has not been lost on a closing basis since the day before the ceasefire seven months ago. Price action beneath 50 RSI since the early-October highs has been soft, and the 21-day EMA near 758.5 continues to act as resistance. 760 remains the primary upside threshold. Below that level, conviction on a move to new highs stays low. The October high at 782 is now clear overhead supply. Daily RSI at 45; the intraday reading never exceeded 35. Risk appetite into the weekend was limited.
Wholesale prices rose 0.3% in October, bringing the annual rate to 6.5%, the highest in nearly four years. Combined with dollar strength, the backdrop is not supportive of multiple expansion or sustained duration strength.
STANDARD DEVIATION ANALYSIS
Sorted by Sigma Magnitude
Today’s Sigma Losers (No Gainers)
| ETF | Move | Comment |
|------|-------|---------|
| SOXX | –5% | AMD (–10%) led the complex lower. Price is trading below former support at 160; the 200-day remains rising. |
| ETHA | –4.5% | Continues to exhibit inverse-VIX characteristics. Dollar strength is a clear headwind. |
| IBIT | –4% | Same regime. RSI 28, first oversold reading since the June lows. |
No multiple-sigma gainers registered across the ETF universe. The absence of bids in healthcare, biotech, and other defensive pockets is notable.
SPY VOL SURFACE WATCH
SPY November 20 Expiration | 7 DTE
- Price: ~751.5
- ATM IV: 17.6%
- Historical Volatility: 18.8%
- IV Rank: 30.6%
Implied volatility is not elevated. The options market is pricing a relatively contained move into next week’s expiration.
Tactical Framework
Selling the Nov 30th 725 puts at $2.95 remains the preferred expression. Worst-case assignment occurs near the rising 200-day that has held for seven months. The higher-risk debit alternative (Jan 780 calls) requires closes above 758.5 and subsequent confirmation that upside momentum is reasserting. Base case is range-bound to modestly lower until 760 is reclaimed.
SIGMA MOVERS: 5-DAY LEADERBOARD
Top 3 Gainers of the Past 5 Days
UNG +8%
Reached ~10.7 against a 10.75 target. Constructive above the 21-day EMA in the short term, but the larger structure remains weak. All-time low was 8.94 the day before Halloween. Preference is to wait for a breakdown next week before considering Jan 10 puts. ATR is too narrow to sell premium effectively.
EWT +8%
Taiwan was the largest standard-deviation mover the day after the midterms and is now the second-best performer of the week. Holding the 200-day (~95) by roughly $1.50. Near-term path of least resistance is toward 101. A close above 101 opens a path toward 112. Selling the Dec 83 puts for $1.75 is a reasonable way to express interest in one of the stronger assets of the past year at a discount.
SOXX +7.7% (5-day)
Still positive on the week despite today’s –5% decline, reflecting the strength of the prior recovery. Trading below the 160 level that previously acted as support. The 200-day remains rising. A couple of closes back above 160 would improve the risk/reward for buying strength. Until then, selling strangles around 130/165 is the cleaner structure.
Top 3 Losers of the Past 5 Days
ETHA –13%
Worst ETF of the week. The 1-for-3 split on October 6 was intended to improve liquidity. The previously constructive zone was 49–63; price is now 43.70 and oversold. Successive closes above 47 would be required before considering January 51 calls. A dead-cat bounce into the mid-40s is possible; the structural floor is lower.
VXX –13%
Virtually identical decline to ETHA. Volatility peaked the day after the midterms (SPY –4.5%) and has been offered since. VWAP on that day was 21.4; current price is near 19. Structure suggests a potential grind toward a 16-handle over the next 7–10 days, which would be constructive for equities. Successive closes under 17.75–18 would confirm.
IBIT –9.5%
RSI 28, the first oversold reading since the June lows. The previously constructive zone was 41–49; price is now 39. This marks a relative-strength breakdown versus the August–early November recovery. A bounce toward 41–43 is possible. Not a buyer here. Jan 40–41 puts for directional downside; Jan 44 calls only after a close back above 41.
Top 3 Trades of the Past 5 Days
Short ETHA, Short VXX, Short IBIT.
Top 3 Trades of the Past 52 Weeks
Long USO +108%, Long ARKG +58%, Long SOXX +52%.
STRATEGIC OUTLOOK
Dollar strength at 52-week highs is the dominant variable. Crypto has historically struggled in this environment. Semiconductors, as high-beta expressions of growth, are being repriced lower while Nvidia digests the leadership transition and Tuesday night's earnings. SPY continues to hold its rising 200-day moving average, which has served as structural support since the ceasefire. That remains the bull case. The bear case rests on persistent rejection beneath 50 RSI, clear overhead supply at 760 and the October highs, and ongoing weakness in small caps.
Oil remains the top-performing ETF over the past year (+108%). The multi-year high was 172 two weeks ago; price is currently holding the 200-day by approximately 10 points. The Jan 152 calls for $8.65 are attractive. Selling the Nov 27th 140 puts at $2.50 to finance the calls is a reasonable structure. There is no interest in shorting the year’s leading asset but do understand the extreme aggression of this structure for the year's top leading ETF returner.
ARKG is the second-best performer over the past year (+58%), with multi-year highs on October 6. Greater caution is warranted here than in oil. Successive closes above 48 would be required before considering Jan 54 calls. Selling the Nov 27th 40 puts for 0.75 remains viable.
SOXX is the third-best performer over the past year (+52%) and is simultaneously delivering one of the strongest weekly returns and one of the weakest daily returns. That is the Nvidia leadership transition in a single chart. A reversion toward 160 is the near-term expectation; the rising 200-day remains longer-term support until it is lost.
The dollar is currently the variable that is winning. Position accordingly.
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Trading Trends is published by John Salama, CMT. Options involve risk and are not suitable for all investors. This is not financial advice. Data sourced from Barchart Premier — barchart.com/get-barchart-premier?fpr=h1fuww