The chart above shows the exit from my Dollar short trade, price hit my target this morning. As I watch other currencies soaring and the Dollar getting clobberred, it is clear the "Barry is a lost cause" trade the other countries are making is carrying on nicely. We all know he is an idiot, but it is another thing to find an opportunity where something has a direct correlation to something he did, and also that we can act upon it. This was one of those "teachable moments." How ironic that this is one of his arrogant phrases, yet the best use of it is to bet against the US when he does something stupid. Get me on CNBC and I will break the trade out to the masses!
Could I have held this trade longer? Of course. Should I have held it longer? Possibly, but I followed my rules so when my target was hit I exited. We are pretty far along in this downtrend, and technically the weekly uptrend is still intact, albeit hanging by a string at this point. Moves will always go beyond where I take profits, that in and of itself does not bother me. I have been looking to get short some of the other currencies up here thinking the dollar would find support somewhere down here. As a result, I selected a shorter term target on this trade. Time to move on.
Here is another trade setup I am watching, BONDS.
We see the trend oscillators pointing down and price now bouncing. I am looking to short this bounce hopefully in the next couple of days. It is interesting to me that this market has not declined more with this huge stock rally we have had in the last 2 weeks. This may be telling us that this rally is about done. It is almost as if this market is hanging tough as a flight to safety spot just in case the stock rally rolls over here. Nonetheless, that is basically speculation on my part and has nothing to do with the trades I make. If this sets up in the next few days I will take the trade. There are alot of people calling the Bond market a bubble up here. They might be right I have no idea. However there is a difference between GOLD for example that is rising on pure speculation and not fundamentals, and BONDS which are rising on pure fundamentals. There is a known historic precedent for rates declining during times of economic stress. It cuts to the heart of the very nature of how money flows. With GOLD there is no such historic correlation. This makes these two markets completely different in terms of their bubble status to me.
However, if you believe economic prosperity is right around the corner, shorting BONDS would be a good play. I just have a short term pattern setting up, no more no less. I have no idea whether or not this market is a bubble.