US DollarI had mentioned previously in this blog, and also in my monthly newsletter, the possibility of a rally in the dollar. Here is a daily chart of the dollar index. We do appear to be breaking out of a downtrend to the upside here.
This is yet another example, of where the commercials had given us advance notice of an upcoming rally. If you look at the graph at the bottom, it is clear that the commercials are heavily long this market. When this condition exists, rallies often follow. This does not mean you just blindly take a long position, just due to this alone.
What it does mean, is that you should begun to look for long side entries when this happens, and be very careful, with initiating any new positions on the short side. This has been choppy the last month, and they did serve up the classic short trap on that new low, that was immediately reversed on Monday.
2 comments:
Chris, this COT stuff is like fortune telling.
Today, on Bloomberg:
The U.S. dollar edged higher Monday in a week filled with inflation data, amid growing expectations the Federal Reserve will continue to raise interest rates.
Of course I don't for a second believe they know the reason the dollar edged higher, but that's another story....
LOL - all it does is help us follow what the big inside money is doing. This is why it works.
Post a Comment