WISH I TRADED YESTERDAY AS WELL AS I CALLED THE DOLLAR
For those just waking up, we are having an upside explosion in the Dollar today as per what I had stated yesterday. We need to see now if these highs go to get a bigger guage on what this means. If we take out the highs nearby here we are likely off and running in the Dollar for the balance of the year. At the very least we have a 70% probability of that which is pretty good in this business. This does tie in nicely with my bigger picture view of a double dip recession. If we get that we will see Dollar strengh, and deflation everywhere else.
Two of my main indicators I use are lagging this move at this point, so this needs to be watched if we take out the recent highs. We may see a divergence there which could tie in to the COT data which is still bearish. Trading off COT data is very difficult because it is big picture fundamental stuff and very rarely does it transfer just directly to a trade on a daily chart. I like to see them both tie in together, which could happen here depending on how this upmove progresses/falters. What I had hoped for was a slightly deeper bounce for a buy than what we had, which could indicate this is very strong underneath. For now, things are looking rosy for the Dollar.
Below is a trade I have on that is benefitting from this Dollar move, the Canadian Dollar.
Sometimes these Trade Station charts do not come out so well when I do the screen captures. That goofy looking anvil on top of where the entry was it displays cracks me up. I rarely trade the Dollar Index directly, I prefer the other currencies due to the volume they trade. This market had a good sell setup yesterday so I got short here. It was clear to me this would benefit from what appeared to be a Dollar breakout.
I heard Jim Kramer on a radio show yesterday predicting a big stock rally if the Republican won in the Massachusetts senate race, yet we have the SP 500 futures plummeting pre US market open today. Although I will believe a sell off when I see it, it does not look good at the moment for today. Maybe the PPT will come to the rescue again. This may be an interpretation by traders that the DEMS are now going to pursue all these other unsavory routes to shove this albatross down our throats, which of course is a major negative for financial markets big picture.
I still maintain that this bill in one way or another, is going to be the catalyst that sets off the next down leg in stocks, but that is just an opinion which really means nothing at all.