Strong Dollar - Weak MCD

Last week I posted a possible swing trade on MCD and MACD divergence, however, the rally that the rest of the market saw did not crossover to McDonalds.

The dollar has been strengthening against the YEN, EUR, and GBP, and as a result global sales are off. Side note on the long run macro: as the US increases their money supply faster than the other central banks around the world, this will cause a shift in the long run equilibrium exchange rate. So I will be looking to sell the dollars strength in the next few months and buy foriegn securities. More on this later.

MCD - MACD

McDonalds posted a low at previous significant support around 51.50 on the daily close. MACD histogram is showing divergence. Prices recently made a lower low, while the MACD posted a higher low.

MCD often holds up considerably better than the rest of the market. A good counter cyclical stock during the economic downturns.

Previous support is right at 57.50, I would expect MCD to head that direction in the next 20 days. I'm going to play a vertical call spread on it with April Calls.