The stocks-dollar hedge is back on. Near the close I bought 4% SSO to balance against the 2% EUO. Today was a wave 4 rectangle. I believe that the linkage between stocks and the dollar will soon be broken. We still have 2 months before the liquidity cycle peaks, however, so it's possible it could last that long.
Tonight I expect we either decline to the 30-minute M/A or it catches up with price.
Friday the Egypt crisis allowed me to buy near the lows and scale up sell into yesterday's close. One more pop to complete the 5 up then I rope-a-dope again, selling SSO and waiting another buying opportunity. I expect the market to subdivide conservatively into the eventual peak due to the deteriorating technical condition. The technicals has not reached the sell point for this cycle but will gradually shift to extremely overbought.
I am still long DX futures from 77.18. Today was a large 3 wave up and another back down. The rally did produce a buy signal against the 1st hourly M/A (red) and price came back down to close precisely on it. This M/A has an envelope of 15.5 cents at this level so the stop is 77.01, but I want to place it 2 cents below round-number, so it is 76.98.
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