Further decimation of the U.S Dollar overnight has now taken us below a critical level of technical support, coupled with a dramatic and powerful “surge” in fundamental / supporting data.
All CPI readings for a number of European countries came in “above expectations” overnight propelling the EURO and other Europeans countries currencies “even higher” with the inverse effect on USD.
Now falling into “oversold” territory USD is setting up for a bounce / move higher, but that’s not of much consequence really – when you’ve just been completely and totally “fundamentally whipsawed”.
The barrage of conflicting data (suggestion of China’s tightening / slowing, as well the continued notion that indeed the Fed sticks with the taper) has created a scenario,where one has little choice but to either “get out-of-the-way” – or risk great pains in sticking to the program.
I choose to get out of the way. I will not participate in any “waterfall activity” as USD’s “time in the sun” appears to have been / will be short-lived, so will likely look to sell ( at a loss ) remaining open positions on any further strength.
This sets up for a very difficult time ahead with USD now rolling over and suggesting a “continued trip lower”. Personally I’m stunned by the activity but in putting a couple more pieces together am of the thinking that “few of the big boys” really have much faith / belief that the Taper will continue much longer – and aren’t even bothering to catch “whatever move upward” in USD may have resulted. That and the fact that the Fed is still very busy “behind the curtain” doing everything it can to crush the U.S Dollar.
I “may” try again to catch a move upward in USD but in getting my hand caught in the cookie jar here this time – will remain wary.
Considering I’ve suggested late March as a time to consider Fed intervention again ( and further printing ) anyway – I’ll now likely look for any further USD strength as an opportunity to sell / get short as opposed to riding it off into the sunset on safe haven flows.
Go figure eh…me the biggest USD bear on the planet get’s caught long.
Hey Kong — G’day from the Orient!
I appreciate some of your pearls, and get a kick out of your quack-bashing! LoL!
Your pearls: Best trades at 3:30 to 4 p.m.; and best to wait until 3 p.m. on FOMC meeting day and minutes day. Muchas gracias amigo! You have my heart felt gratitude on this day of Thanksgiving. (Full moon on Valentines and Venus day (Friday, aka Freya’s Day, the Goddess of love — good a day as any to serve up some gratitude!).
I’m looking at a topping in metals/miners (inverse of USD, I believe) on the open. Everything in my indicators — preferred wave count, Bollinger Band studies (mine are much more in depth than the oversimplified, binary “20, 2” – yes or no? scenario most traders follow — including Johnny Boll’g’er himself). A scenario similar to January 24-29 IMHO. Only difference: GDX made a “higher high” completing five waves up on the 15:00-16:00 candle on Jan 29. This time round, I believe it will top at 15:00, and not make that additional push up, not make that higher high, for a mere three waves up zig zag. As always, we’ll see how it goes twixt now and Wednesday afternoon.
Keep up the excellent posts & best trading to you!
Cheers ~ zkot
Long time ol pal! Thanks man…I hope you’ve made out ok.
I too see a nice chance to take profits in the miners and metals, then look for re entry. Bang on.
I think they are shaking you out of a very smart long term dollar strength move
I hope you’re right, and appreciate it. (Not like I haven’t been tossing it back n fourth the last few hours)
So……we’ll stay “on guard” here throughout the day.
It only takes a couple seconds to push the buttons.
The movement as of late is a bit strange I agree, but I also think fundamentally, nothing really has changed. The Fed are sticking to the Taper talks, China is slowing, and Eurozone remains a mess. Just look at what Draghi says in the last few ECB meetings, “… European Central Bank is considering charging lenders to deposit spare cash with it” …and then have a look at this when he left rates on hold last meeting, “The reason for today’s decision not to act has really to do with the complexity of the situation that I described and the need to get more information….We are willing, and we are ready to act.” (Mario Draghi).
I mean Draghi sounds very dovish to me, and although the Euro had that spike up a day or two ago, to me it feels like a “flushing” rather than trend changing. I still think Dollar bull is a good play looking at charts on everything besides Sterling (cable is just rallying despite Carney’s pleas lol).
What has me hesitant to load up on any dollar longs is the dollar Index…if it breaks through support and firms up below it, watch out it might be time to sell USD, but there are more “false breakouts” than breakouts in the trading world today so we will have to trade what we see.
I’m with you 100% Rob – great breakdown really….fantastic.
The thing is……”I’m not buying the taper” in my own minds eye, so “this kind of action” is “already” starting to confirm my forward looking ideas!
So it’s a rock and a hard place here in the interm as……ya – USD long makes fundamental sense in line with “tapering”, and it’s been my “plan” to get long USD into “whatever form of correction / sell off” we’d get but even at that – I’ve considered as soon as late March ( now only a month away ) the idea of “tapering the taper” and USD moving lower on “that” news.
So do we get the “expected” USD bump up / flows on correction here? Or just a steamroller rolling right overtop of the POS?
I want to see it take off, and know we are at a level of support but regardless….a “lower low” has now been made.
Gbp/Usd move up with no reason. Now retailer short much more than long positions. I realized it everytime when this happen. when we have 78% retail short They will push as far they can because its free money collected.
I used to be skeptical about this but I have seen evidence market pushing for stops.Remember Christmas holiday time EU got pushed over 100pips for no reason no news nothing then fell once market resumed.
Everyone is saying the same thing here Careydina – the markets are on the verge of “something larger” and everything is being pushed to extremes.
USD has now broken a significant level (and the EU currencies have popped) so……here we are again with the age old question.
Is it a “fundamental change”? – or a simple extreme in the technicals?
I have mixed feelings about it as of “this moment”, but will look for USD to indeed “move higher” before lower, and much lower as I’ve always anticipated. Even at this moment it appears to be firming up “exactly around the area” of support that it’s just recently broken so….
Expect it to “now” move higher. Go figure right?
I’m sure GBP/USD will come down, but depending how far “underwater” you may be….I can’t say how far.
Makes sense. Yes that dollar index has everyone scratching their heads at the moment…if we close low on it I don’t think it bodes well but we will also have to see how it opens up next week. I have some positions running but really to me this week has been Fukc all…made some money, lost some money, but really got nothing but headaches. I’ll check in next week take care.
Headaches all the way around Rob so ya……likely not much to see here today.
Yes. ultimately it will surely come down. But it seems never break 1.62 after the skyrocket since last few month ago…
Hey Kong, good post and good morning. Nice to see some honesty in the blog world. It is hard to find. Please keep it up as its great for readers to see how the market can frustrate even the best. Taking some small losses here and there keeps you in the game for when the clear moves come.
The USDCAD pullback to me still looks very orderly which usually lends to continuation in my mind. I held my small USD positions….well mainly because they aren’t really doing any damage yet. And I’m very interested to see what happens to the SPX and the USD over the next 2 trading sessions…..because it looks like we are at a critical point.
It is what it is….as it can’t “always” goes as planned.
I didn’t like the action yesterday, and now today has pushed passed some tech levels as well stretched my “fundamental thinking”.
It could just be a push to extremes sure, but we don’t stay in the game long “depending” on that. I’ve still got open positions and all math could have it at -2% if I decide to scrap it.
Otherwise….another day – another dollar.
We are at a very fine line here / significant area for USD so…no reason to be a hero. I’m lettin er ride here for now.
If you look a PM’s it seems likely that the USD might have a rally in it……but a short lived one. I think maybe metals are sniffing out a USD top sometime soon…..maybe after a strong stock correction.
yes for sure gbp/usd will come down. 700/800 pips? So far it ever break 1.62
I think they’re flushing out the USD longs so the least amount of people benefit next week; which coincides with my idea of what I think will happen to the US stock market. At this point, how the hell can a short not throw in the towel, the S&P has been unstoppable for a week and a half; as quick as we dropped we popped even faster, it’s insane! They have the perfect opportunity to take the markets much lower now that the shorts are fried.
As much as today itself sits as “more than frustrating” with me..
All things point to USD move higher ( my thinking would be a final pop to just over n above the 200 SMA ) which “should” coinside with a drop in equities ( as you’ve also suggested ) and then it USD gets shit canned / QE talks start up again late March as “I’ve forseen”.
As Jskogs has it…..you bet “metals” have made the turn ( and now a reasonable correction inverse USD strength )
So where the f%#K is it??
Watch these assholes leave me sitting here right til 3:55…..should come as no surprise at all right?
Screw it – I’m holding thru.
Monday is another day.
Yen hasn’t followed this recent move up with the indexes. So one of the two is lying. Given the BOJ meeting next week, and the overall consensus that they will add to the stimulus package. I think the market could be in for a surprise. The kind of setup i’m seeing right now with the yen suggest to sell it but it appears too perfect. In the past, similar ‘perfect’ setups (per my system) have resulted in a fake move; in this case therefore would mean to go long yen. Currently, risk/rewards actually favours a try at long yen around monday with a tight stop. If this fails, you can be sure the yen will go down hard for a few weeks at least, with plenty of opportunities to sell
We are all on the exact same page – however frustrating a page it is.
JPY pairs “a hair away” from rolling here as well so….literally – every single thing hanging / pushed to extremes, and in this instance I can honestly say – for the first time in a very long time…my patience as well.
Tequilla n beers a lil early here today.
You only live once…..
Adding long USD/CAD and HOLDING every thing I’ve got.
Ya yen still very much pushed but not broken….stock market retest of highs. ….dollar more or less finding some support. All it says to me is hold and go buy a drink. Have a nice weekend Kong and all
Piss me off….first time in as long as I can remember.
Well…..just goes to show – you can always get thrown for a loop.
I’m several sheets to the wind as it is. Enjoy.
Things seem fishy, the VIX at record lows, the S&P up 100 points on low volume over the last week and a half. 100 Points!!! (are you kidding me !?! lol). Something big is going to happen soon.
Hence my concern.
You can’t risk being on the wrong side of things like this.
As of yesterday morning…we’ve offically entered the “twilight zone”.
EM currencies catching a nice bid too. I guess everything is “fine” again.
Shorting AUD/CAD here on what looks to be a right shoulder starting to develop on the 4 hour chart. Regardless of this pattern playing out, I like this pair short and will continue to slowly add over parity if we get there.
Sitting on my big fuzzy mits looks like a good plan for the moment.
I’ll take it as it comes Monday – flat and now -negative on the week.
Gbp/usd pushing to new high as retail short is about 90% now. Don’t think it will drop as soon. D1 chart certainly overbought. Waiting for good opportunity now and flight back. Next week will be a good start to check it out again Hahaha…
good luck to all of us!
I have taken profits in SLV position ( Options of course ) with SLV taking a 4.50% jump today would expect to give half back or there abouts…. plus daily silver & gold getting over-bought here a little…. 8hr is roasted so the wife gets a upgraded gift for V-day… I look like a hero & hopefully re-load early next week at slightly lower prices>>>
Have a great weekend – Cheers Schmed
Nice play Schmed, for my Silver fix I’ve been getting in and out on CDE (June 10 strike calls) a few times this year with good success.
Great time to sell after this runup.
EXK’s been great since around 3.70 – and ya….selling now with lots of opp to buy again for bigger run.
GPL has also looked great…as a cheapo play.
Yeah, EXK looking good, I had that on my radar for a while after I seen you mention it on here a while ago. Lots of upside potential. I feel safer with CDE though longer-term, since they’re one of the largest silver miners in the world and recently acquired Global Royalty Corp. I figure a company acquiring other companies will most likley stay solvent for a while (at least until a good move comes, as I’m probably too stubborn to sell a miner this low since longer-term “I know” it’ll go back up lol), you never know if you’re holding one of the smaller miners though, they could go bankrupt.