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My indicators are giving neutral-to-bearish readings this week and, while today could be somewhat bullish because it falls within the first few trading days of the new month, I think it’s prudent to be defensive at this point. 

Interest rates are starting to turn up, especially in Europe, and the U.S. dollar is in a downtrend at this point as it continues to weaken. The only currency I see right now that is undervalued is the euro, especially considering the way Europe is loosening up a bit as far as financial lending goes.

While a weaker dollar would be good for U.S. exports, the problem is that the drumbeats of a trade war are getting louder, which would really cause the economy to suffer. Already, the current presidential administration is talking about putting penalties on imported steel and things of that sort, so this is a time in which there are a lot of risks for the market as a whole.

In this environment, I’m recommending a bearish trade on Kellogg Company (NYSE:K):

Buy to open the K Sep 62.50 Puts (K170915P00062500) at $1.10 or lower.

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