I did not read the article since I would never read the NY TIMES due to their socialist agenda they push, but there was some commentary today by a supposed " Pulitzer prize winning Economist" about the FED. The gist of the article according to what I have been told was that it was time for the FED to put their foot on the gas pedal, and that they had been too TEPID! This guy is a political hack, he is no economist. I am sure most people have heard this joke, but here it is. There was a group of interns at a hospital going through the rounds with a resident. At each stop the resident went to each intern and asked them for their diagnosis of each patients condition. When they were done with the rounds the resident turned to one of the aspiring doctors and said, "in all my years I have never seen anyone get every single diagnosis wrong, have you ever thought of becoming an economist?"
As a trader very few things surprise me since I have seen so many out of the blue unexpected things in my life with the markets, but this did. This guy is either a complete MORON, or he is a liar. Not even one of my Saint Bernards ( I have 5 ) is dumb enough to buy that thesis. I will let this writer pick his own label if he does not like me calling him a moron. I think even the most uneducated person has at least a general idea that the Federal Reserve is controlling the whole financial world right now. You can see in the chart that although in general the dollar has moved down only slightly from it's low in 2008 net, it has had a very large decline since the March 09 stock market bottom. This is not a coincidence and this pinhead knows this full well. It is time for political agendas to get put aside and for people to all rally around fixing what is really wrong. It is time to pick a side, you are either a liberal who wants more of what we are seeing, or you want free markets, the time is here for this whole thing to go one way or the other. You would think that most people know now that we are out of money and this just cannot continue, but there are a surprising number of people just with their heads in the sand who just think everything will work out fine on it's own. It won't!
For someone like this to write something along these lines shows a complete level of irresponsibility that just has to stop. Policy decisions by the intern are made from listening to people like this. The government and the FED have deliberately driven down the dollar and now we have this inflation scenario that a lot of people feared would develop. Putting 50 to 80 Billion into the market every day to drive up equity prices is being too TEPID. What these dingbats don't realize because they are so lost in trying to further their political agendas, is that what they wish for is going to hurt them. They will make less money, be taxed more, and have less freedom in the Nanny state they are trying to create.
As for the Dollar, I think we have now traded enough below the low of 2008, that the idea of a trap is close to being out the door, and we just have a free fall happening. We have to close on a weekly basis back above the level I have indicated on the chart to get serious at all about a rally. This will not happen as long as the FED keeps doing what they are doing every day. We still have a loaded dealer deck where for the most part we know the card count is in our favor to bet on the long side of most things due to all of this. June will be an interesting time. As I have stated, since it is the most obvious short of all time, I don't think it necessarily is one. The FED not only has our whole economy now on it's back, it basically has the world tagging along with us. They will crash other countries stock markets if they stop now as well as ours, so that is the slippery slope they have created. I have no advice for how they solve this problem, they created it and actions have consequences.
I do think we all need to keep our eyes open for the "big trade" on the downside, but at the same time not get too carried away fighting this. The next big move is going to be down in most things, but I cannot tell you exactly when that is going to start. I doubt it starts before June. Silver ironically is taking my post into account and right on cue seems to be starting something but we will have to see. I looked at some of my things there the other day and said out loud, well it looks like this is setting up a pullback buy, then I just laughed out loud. I am not going to touch that market in either direction here.
I did exit the Hogs short yesterday, and got a bit lucky. I went to the market just a little before the close thinking I was going to exit at the close anyway, and wound up getting out better, very close to the low of the day. Sometimes you get lucky. There is no reason to think this won't continue down, but I hit one of my exit techniques parameters yesterday, and this was a nice trade with quite a few contracts on, so out I went.
At the moment I am flat, here is one trade I have orders in for today, the Canadian Dollar.
This market has lagged the other currencies here in the last week. My PNJ oscillator has not reached the sell zone yet but as I have stated, that is just one tool and an experimental one at that right now. In general I do not like to trade against trends like this, but since yesterday was an outside bar up, my logic is that if we then get an outside bar back down today, that is telling me the short term momentum is rolling over. I also have some patterns in a few other things I use that support this trade. Will it be any good, or will it even trigger, who knows? You can see on the chart I have an alert set where my entry orders are. This way I can go about my business of not death gripping over every tick during the day.
I think alot of beginners or readers of this blog do that and I would suggest not doing so. I can tell you that once you come to grips with the fact that prices are going where they are going to go without you rooting for or against them, stepping back and not babysitting price movements becomes a lot easier.