BUCKING THE TREND
I see many markets in transition right at the moment potentially changing from down trends to up and it logically follows then that the Dollar would be doing the opposite. In the world of one trade that we live in, everything goes one way and the dollar and bonds go the other way. One thing that really jumps out at me about this chart is the huge POIV divergence that is here. Usually when we see this a large move going in the opposite direction will follow. This is also happening when we are close to a seasonal down tendency. Me likey dis one. Once again my Synthetic COT indicator is off in the clouds telling us nothing. I should call it Spalding, since it reminds me of the Caddyshack character that is clueless.
Ideally a test of some sort of the high will follow, then a short entry can be taken. We do have NFP tomorrow, but I don't expect that to mean much. The government interventions both real and rumors of them, are driving almost all the market moves right now, so the NFP is almost a non story other than good fodder for the political hacks to kick around. They will want to use it to bury Barry. I say out with Barry and get Clinton back and let's see if he can break Wilt Chamberlains record with the secretarial pool! We know the NFP report along with so many others, are so doctored, that they do not offer anywhere near a true picture of what is really going on. There is no way to trade off this kind of crap and there never has been. Just place whatever orders you would place whether the report is coming out or not. The worst case is you get a few ticks of slippage, big deal.
I really have no idea about the big picture gloom and doom stuff as to what the dollar has to do, the money printing etc.. That is just not tradeable information. Many of the currencies also look like buys including the Euro, so it logically follows the DX should be a sell.
I traded some emails today with one of my readers that is very concerned about the big picture and the global crisis that could be coming. I want to make something clear that perhaps I did not do the last time I brought this up. The main reason I don't seek out "expert" opinions on things, and rely on my own assessments, is not because I think my opinion is better or more accurate. It is because I am accountable to me, others are not. If I lose 50k because of taking some action based on a view on something, that view had better be mine unless I can bill the owner of that opinion the 50k and get paid. There is nothing worse than losing money listening to someone else instead of yourself. I have made that mistake in the past many moons ago, and won't ever do it again. I urge all of you to be careful about hunting for opinions that just reinforce what you already think If you decide to seek them out, read the opposing views. I can assure you if that if you are scared, you can pretty easily find supporting opinions of others who feel the same way.
The MF Global situation at this point is continuing to be very weird. I guess clients are getting 60 to 65% on the dollar, from the account balances they had. This is quite frankly unacceptable, and it also appears Corzine is getting a complete pass on this. So at this point we now have Congress trading on inside information that is illegal for any of us to do, and now we have a former Senator and Governor now who oversaw this MF disaster not being held accountable in any way. I have always said that life is in inside game and you are either inside or you are not. I think these two cases pretty much prove that to be true. There just is simply nothing any of us can do, when the Madoffs or Corzine's of the world decide to blatantly break the law. Laws are there as deterrents, but some people just ignore them.
This does not mean that the whole system is going to crash. I have no doubt there are many more liars out there and another big firm or two could be doing the same thing and be defrauding the public. Just try and split up your money, so you are not ruined if one place goes down.
Here is another market that might be setting up something, Wheat.
A possible seasonal low point is coming and some of my private stuff shows this could be setting up a buy. The problem here is that since the whole world is setting up a pullback buy, and this is one of the weakest markets, do we do it? Probably not, but we have to see how things look if and when the setups develop. If we have buys in the stock indexes, currencies, energies and others, chances are the Grains being weaker, will not be the ones I choose to play.
I did start scaling into a short position in the SPY's today just based on how overbought the market is in a weekly downtrend. If it is going to pullback it should start in the next couple of days. My position is small at this point and will be added to if we close strong tomorrow.