“With UUP weakening this week and falling below its 50-day moving average for the first time in a few weeks, it seems that the call buyers are positioning for a potential bounce,” he added.

Most of the time over the past year, a strengthening dollar translated to lower equities and precious metals prices. However, market correlations are fluid, and stocks have been rising with the dollar recently. [Why Stock ETFs and the Dollar are Moving Higher Together]

PowerShares U.S. Dollar Index Bullish

Full disclosure: Tom Lydon’s clients own SPY.