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Pro Analysis

King dollar to halt Trump rally in the short term, trader Kilburg says

People walk past a currency exchange shop displaying a giant US dollar in downtown Cairo, Egypt on November 3, 2016.
Khaled Desouki | AFP | Getty Images

Velocity is defined as the speed of something in a given direction, and the historic velocity we have seen in the U.S. dollar will potentially move other asset classes in a new direction.

After 10-consecutive days of the U.S. Dollar index surging, the U.S. equity market should be on a path to take a pause.

Stocks have moved in a single direction since Election Day resulted in a Trump victory: straight up. The newly awakened "King Dollar" has moved closer to parity with the euro, higher against the yen and also pushed exchange rates lower for emerging markets. In conjunction with this sensational move by the greenback, Treasury yields have jumped higher to further the case that the Trump rally may be forced take a pause short term.

As we look to the S&P 500 benchmark to play this pause in equities, we look to two approaches to capitalize.