$dxy

Risk On Alert! – Don't Just Sit There!

Pot Stock Watch 4 Comments

Japanese elections play out exactly as expected with a HUGE GAP UP in JPY crosses here Sunday night.

As the currency wars continue – everything is clearly in place for some serious USD devaluation. If you choose to just  sit and “see how things go” you will soon (if not Monday morning even.. ) be left in the dust – as the dollar has absolutely no where to go but DOWN. I don’t go making calls in a minute to minute / day to day type way ( although if you’ve been following the trades at all – you’ll find that I might as well) but…….this is it!

I expect markets to power forward here this week and as simple as it gets – all assets shall rise!

If you’ve got dry powder – I seriously suggest no…..I SERIOUSLY SUGGEST you take this opportunity ( and perhaps get out of bed a little early tomorrow morning) to pull up a chart or two, get that broker of yours on the phone – and place a trade.

I am already trading / initiating further “risk related” trades across many many currency pairs with the same ol underlying theme – buying the risk related currencies….and selling the safe havens. I am expecting to do very, very, very well this week. Watch for “whipsaw” type activity – and please take the time to find entry at areas of support – don’t be surprised if “they don’t make it easy” – but  it’s time….I believe Christmas has come a week or two early.

Kong……………………Gone.

 

 

Death To The Dollar – Reserve Status In Question

Pot Stock Watch 4 Comments

I clipped / edited this as I found it to be most interesting:

A common believe  is that there is no credible substitute for the dollar – so the dollar is safe as the reserve currency.

Another believe is that it would take decades to replace the dollar (central banks need to have “some” assets that hold or increase in value right?).

Increase in value right? …………………………………………………………….obviously the dollar is not doing this.

In truth almost any other asset is a better reserve than the dollar. There is no need for every central bank to pick the same one.

Some believe that it would take the Gulf States many years to replace the dollar as the currency oil is priced in. This is a peculiar claim since Iraq and Iran switched to non-dollar sales in short order (Iraq before the war). As should be expected with a dropping dollar, Iran says it profited from switching to non-dollar oil sales. Other countries can see this and can just as likely – switch too.

Imagine that central banks currently had their assets as 60% Dollars and 30% Euros. If the value of the dollar were to drop in half, then they would have equal value in Euros and Dollars without changing anything.

For thousands of years gold and silver have been used as a store of value. Imagine a central bank with 10% in gold and 90% in dollars. If the dollar goes down by 2 and gold up by 5 it could suddenly have most of its assets in gold.

The point is that the dollar could be replaced as the dominant reserve asset even without central banks ever selling their dollars, just by it’s dropping in value. Several times in the past the dollar has dropped significantly in value in a just a few short years.

Why would now be any different?

The Dollar – Get Down And Stay Down

Pot Stock Watch Got something to say?

I’ve been going on about this for almost a full month now, and despite the profits made dipping in and out – it has been no simple task sticking to the dollar short trade. The USD Dollar has done just about everything in its power to confuse and confound traders as of late – and has hovered around the 80.00 mark for far longer than most may have expected.

The Dollar is now set to provide some consistent and “tradable” downside action.

As outlined prior with the “swing low”  in silver (and now subsequent swing low in gold as of Monday) we now see that the dollar has (opposingly) made its swing high. Often when solid technicals line up with the underlying fundamentals in such a perfect manner – big things can happen.

We already know that The Federal Reserve wants a weaker dollar – so on a purely fundamental level (and in conjunction with the FOMC meeting set for Wednesday) it appears that this piece of the puzzle is well in place. Coupled with a “swing high” as well as a failed attempt at a downward sloping trend line break in the USD over the past two days – puts us right on track for a solid move….south.

There are several ways to play this  – be it through equities (that will rise with a falling dollar), gold and silver related stocks and ETF’s, and of course through the currency markets where I will likely be adding to current positions long both AUD/USD and NZD/USD as well short USD/CAD, USD/CHF – as well  a basket of other (and more exotic) “risk on” related pairs.

For more on the “swing low” please reference the prior post.

A Dollar Bounce – Likely A Dead Cat

Pot Stock Watch 7 Comments

If you’ve never heard the term “dead cat bounce” – here it is. A dead cat bounce is an industry term used to describe the upward movement of a given asset “contrary” to a larger degree down trend.

Dead Cat Bounce – In finance, a dead cat bounce is a small, brief recovery in the price of a declining stock.Derived from the idea that “even a dead cat will bounce if it falls from a great height”, the phrase, which originated on Wall Street, is also popularly applied to any case where a subject experiences a brief resurgence during or following a severe decline. (thanks Wikipedia)

In this case – I guess it’s not exactly a dead cat bounce, as the dollar has only just recently begun it’s expected downward fall – but I do expect a “bounce” all the same. As far as trading it goes – if you are an equities buyer – I imagine you should get some nice opportunities to buy in coming days, before this thing lifts off to new highs.

As a currency trader – I am not going to bother doing anything short of watching the dollar closely – and aim to catch it at its peak (perhaps around 81 late in the week) before re-entering “short dollar” positions across the board. It’s not worth trying to squeeze every single penny, and push any further short dollar positions now ( considering I am 100% in cash).

Best trade is no trade at all here – and as I’ve said many times before – I am not missing anything – there are a million trades – and chasing anything is a fools game.

$dxy Novemeber 26

$dxy november 26th

Don't Get Fooled Again – EUR Is Going North

Pot Stock Watch 4 Comments

Listen……….

The $dxy (or symbol:$usd) tracks/charts the U.S dollar against a “basket of currencies” where 57% of that basket is weighted EUR – and the remaining percentage is broken down as follows:

http://www.fxtrademaker.com/usdx.htm

Often… traders will watch this symbol, and make assumptions as to the dollars strength or weakness based on its movement.

BUT……………..

When looking at individual currencies independently – “against the U.S Dollar” one can see that this is by no means accurate – and in my opinion…..extremely misleading.

I see the $dxy at 80.05 presently ( up +0.14) – which would suggest dollar strength – right?………RIGHT?

Then why is my screen “so deep in the green” when I am short the U.S Dollar?

HMMMMMM……………

BECAUSE I AM SHORT THE DOLLAR AGAINST EVERYTHING UNDER THEN SUN….”OTHER” THAN THE EURO!

AUD  killin it……NZD killin it………CAD killin it.

So….You get it?

Don’t get fooled…the dollar is goin down….down……down.