After running across the trading range last week, the S & P ended Friday on the high, but just below its 200-day moving average at 1115, its breakdown point at 1121, and its intraday high of 1130. Facing technical resistance, a very short-term overbought condition, no significant economic data, a holiday shortened week, pre-election jitters, and a strong dollar, the market was destined to see a little bit of a pullback. The action in the Dollar proved to be the main catalyst. Once again, the Dollar wasn’t strong because of a positive outlook on the US economy. Instead, it rallied by default. The Euro was getting hurt after an article in the WSJ reported that European Banks had not adequately been tested by the “stress test” and that many were exposed to sovereign debt risk. This isn’t new news, but it was still rather negative considering the overall void of news with which investors were faced. All the usual trades went south. There was pressure on crude and the Energy sector. The “risk trade” was being unwound. Fears that another May-type decline might push the consumer away hurt the consumer sensitive sector groups. Proof that the Dollar wasn’t stronger for the Dollar’s strength is that it fell versus the Yen. In fact, the Dollar fell to a 15 year low versus the Yen. Volume was worse than pathetic. After a nice flurry of trading at the start of the month, we’re right back into a “wait and see” type market. There are times where complacency can serve you well. This is not one of those times. We want to scale into buying on weakness.