Here we are again with my nemesis for this year the Dollar. I have been wrong on this market in terms of my big picture view, having expected a rally for awhile that has not transpired.
I went long this market on Friday where the red arrow indicates. As you can see we are at what in the past has been a seasonal low point, and there is divergence between the price and the oscillator. I have no idea if this market is actually going to find any traction, but I do not trade on my opinions. This is a buy setup for me so I took the trade, PERIOD. If I am wrong I will get stopped out and move on to the next one. There is a little bit more to this entry pattern than just what I explained, but I am not going to delve into it here.
In general, buying in steady downtrends like this is not a high odds probability. Often oscillators will diverge like this for months, and the price will just march steadily on. I do still maintain that this is a short squeeze in the making at some point. I know of nobody other than a few fellow traders that are looking at the long side of this market. The bears have been right, and I have done 2 different short trades on the way down that have profited. However, by and large I have missed the boat here being too bullish too early.