Long The Dollar

With much talk about the imminent demise of the Dollar abound my demented mind sees a possible long opportunity in the DXY right now. Let’s review:

As of 12:05am the DXY dropped all the way to 76.43 – which according to 2sweeties’ DXY retracement levels calculator is only a few ticks away from a high frequency long RL:

There you have it – should this level fail the next RL is at 75.94 – quite a bit away and if that happens we’re bears are in a world of hurt.

One more chart to consider is the 2.0 BB on my EUR/USD chart – yes, it might go higher here. But consider that we’re outside the BB plus we have a pretty good RL at hand it’s not the worst setup I’ve seen.

So, let’s see what works better – headlines and opinion pieces in the MSM, or a proven statistical reversal odds calculator. My money is on the latter ;-)

This entry was posted on Tuesday, October 6th, 2009 at 12:10 am and is filed under Retracement Levels, Trading. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

  • orth
    The 60 minute trend lines on the $spx and spy, nor have the dailies been broken. keeping it simple for now with my short covers based on this principle. However I made sure that I did not set them until after the volataile first 1hr. Things for the bears have shown continual improvement sense the first hour. The triq and trin show overbought.
  • hank30
    I'm glued to my seat watching spx 1061. If we break, It'll take some shorts off the table. Some indicators signal a different pattern going on than the fractal suggested by Mole. MACD signal has not crossover on the daily chart, despite a 41 points move. We may start heading down to 1042.
  • orth
    I agree.
  • Vardoger
    Looks as though TNX wants to retest the major 38. 2% @ 32.9
  • AS2009
    Dollar (UUP) breakdown warning - we are hitting against 22.60 multiple times here ..
  • ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨
    ¨°º¤ø„¸ N E W „ø¤º°¨
    ¸„ø¤º°¨ P O S T ``°º¤ø„¸
    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸
  • roscoe_casita
    For fucks sake, let this be a bull fake out, i'm fucking tired of lossing money, and having my profits turn to losses,


    Fck1
  • I'm with you Malus - and I think we are all worn out. This is not fun anymore - but as traders we owe it to ourselves to keep our composure. Go out there - take a walk around your neighborhood and work off the stress - then come back.
  • roscoe_casita
    much better now!
  • roscoe_casita
    thanks mate, i'm doing that right now,

    Still holden, but fuck me does this take the stainless steel rat mentality,
  • Guest
    We have launched a new Options discussion board for anyone interested in specific options chat:
    http://www.optionsvista.com/forums.html
    Enjoy!
  • shortcover
    nabbing TZA...
  • raised_by_wolves
    I'm calling a breakout. I picked up some SPY Nov 107 calls a few minutes ago to deal with this.
  • c2
    Be careful you might get whipsawed on both sides of your trade.
  • raised_by_wolves
    I have a conditional order to sell my SPY Nov 107 calls should SPX drop below my channel midpoints.

    http://screencast.com/t/KIsOFO0vVfi1
  • Lordted
    I don't use chanels in that way but interesting chart.
  • Is your SN taken from a band's album?
  • raised_by_wolves
    Actually, it's taken from a photo book.
  • PeterK80
    ERX is taking off... crazy. No signs of slowing.
  • Almost a 20 point move up in the SPX with little retrace......
  • anthem
    Some serious ramping going on. After the initial bell, there have been two very large spikes in volume, one around 10:40, the other around 5 minutes ago. Both spikes were about triple the volume. . . Looks like another one happenened a few minutes ago as well.
  • Anthem, what feed do you have that shows that data.....the one I have has sketchy volume data....
  • TheCrowe
    just heard that the dollar is moving to the pink sheets... uup.pk
  • standard_and_poor
    Closed 3% position in shorts from 1044 at close to break even.
    Next stop is 1070 for remaining 2% of shorts from 1070 spx.
  • raised_by_wolves
    Breakout to the upside coming?

    http://screencast.com/t/KIsOFO0vVfi1

    Is anyone using OTM Nov calls as a hedge for their Mar puts?
  • Vardoger
    Anyone have a moment to consider that we are re-testing the break of the bearish wedge we have been since July 13? It's not all that uncommon to retest a pattern like that, right?
  • roscoe_casita
    Yeah, atm we could have broken out of the down channel with a slight overthrow
  • c2
    I think you are right Vardoger, but with the trend in the dollar, how can we be sure?
  • mattco
    Just read that the US Treasury is going to auction $10 billion in 16 day bills. Is that normal? Who the fuck buys 2 week treasuries? I have never heard of that before.
  • DesertEagle
    Because no government wants to hold longer than 2 weeks..Can't say as I blame them.
  • roscoe_casita
    Bought .UUPKW
  • c2
    I feel like a lab rat, and the negative reinforcement is brainwashing me to never go short again...too much pain. Normally this is a sign that a top is near, but I am burnt out.
  • trader69
    some days I wonder why I do not listen to the old saying...if the market is in an uptrend, you buy the dips....no questions asked---until it stops working. My only consolation is that I short the rips, but the profits only last 3-4 days tops. you can say burnt out. I can't wait for the top to be in. the similarities b/w end of june, end of Aug and now are uncanny, its not funny anymore.
  • Vardoger
    We are right at the 20-month MA
  • I have the DX (360 min bar or 1/4 day) on a TD Buy Setup Bar 9. This will complete (should unless we really fall out of bed from here) over a TDST support level on the same chart of 76.13. This bar ends at noon (obviously).

  • Meshugga
    So were sitting on 1057 which is a key number for me. Sold my SPY calls here. Tempted to fade this but the f-n govt and pomo bullshit makes it tricky.
    XLF seems to be hitting a wall of resistance at $15.01-$15.06, going to short it instead.
  • losershot
  • edgetraderplus
    1051 area, now a little higher, can be important reistance, intra day, if price starts to
    break soon. If not, price will continue to absorb selling and work higher, putting the
    daily trend in a firmer position.

    re esz
  • Douala
    If $USD breaks 76 then next target is 74.50.
  • edgetraderplus
    Re fiat Fed$...not showing any ability to rally off lows. Will go lower to find support.
    30 min intra day ranges relatively wide, not a positive sign for demand...
  • Nightwind
    To Berk: The majority of Americans have never experienced a true bear market in their life times and at your age...neither have you. Like I tell my older sons, I can't give them first hand advice on how this will play out, only that to prepare for the worst and then some. This will be a world crash, not just US. If we are lucky, it will be swift and not like the Japanese bloodletting.
  • edgetraderplus
    Broad strokes, but on point for no one knows when it will hit, just that it will,
    but I suspect not swift at all...at all. Imaginary currencies are killing the real world.
  • Vardoger
    Shit, the "real" world is doing better every day our economies contract. Think about it
  • Oh, and I am not claiming that I have. I can't even remember the Tech Bubble except when I look at a 10 year chart of the $NDX.

    I am just saying... Where are the protests. Where is the angst. Even from the younger generation (as I am) where? where? where?

    I mean, now we are content to sit in our suburban homes and bitch about the hardships that we "feel" are being thrown at us. Fully forgetting, or never even knowing, what a hardship truly is.

    And for the record, my grandparents are in their 90's and both remember the Great Depression quite well. I listen to my elders...

    Skål!
  • roscoe_casita
    they are angry, and they are doing things, look at You Tube,

    The second revolution won't be broadcast on T.V.
  • Nightwind
    You're actually dead on, but my older sons (about your age) look at me like I'm fucking crazy. In their defense, they don't have your economic education or foresight. This episode in our history will change America forever in my opinion and hopefully for the better.
  • You can't give me credit for "economic education." All that amounts to with me was one semester of economics in High school being taught by our Baseball coach. Granted, I did get extra credit for laughing at his jokes...

    But, thanks...

    Skål!
  • Nightwind
    Tell you a funny story. I was working during the '87 crash and didn't know it happened until I got to trading stocks in 1994. Like most folks, I lived my life in a bubble.
  • roscoe_casita
    Lol, that's 2000 for me =)
  • Hanuman
    Nightwind,

    What's your timeframe for this crash? This insane rally has burnt me very bad so far.

    Thanks.
  • Nightwind
    Timeframe: only God knows. Being burnt, that makes two of us. Probally the safest bet on the short side is breaking of the arithmetic lower trendline of the spx and wait for retest
  • c2
    My guess is that they crash the markets after Oct. OPEX. Too much open interest on the OCT SPY Puts for the markets to go down now.
  • peder1001
    yeh, but thats what we all thought in aug and sept opex.
  • skynard
    Good point. Makes sense to me.
  • Vardoger
    Gmak you out there? It seems we are getting that re-test we talked about last Thursday.
  • Bought some Alcoa Puts.
  • Jack let's go out on the bay and do some grouper fishing :)

    I still fish with my Daddy sometimes...but I always throw them back :-)
  • ItsOnlyPaper
    Ya, Grouper are too cool to eat.
    If you're a diver, Grouper are the one of the best fish to see on the reef!
    Ever goto John Pennekamp Park in the Keys?
  • GS is not following this huge rally ??? hmmmm
  • anthem
    pretty big resistance@188. . . also pretty big move by financials yesterday.

    But eventhen, yes I agree with you. a bit surprised. DOn't worry, we'll get a small correction and then GS will ramp up and pull the rest of the market with them. .
  • Ok that needs to be it. Right here. Right now. Die you mother...
  • DesertEagle
    Amen
  • Vardoger
    Retesting the break of the 7-13 to 9-3 trendline on SPX?
  • Dollar crashing
  • dollar
    Oct. 6 (Bloomberg) — Saudi Arabia hasn’t held talks with other oil producers and major consuming nations such as China on moving away from the dollar as the currency used to buy and sell oil, Saudi Central Bank Governor Muhammad al-Jasser said.

    Al-Jasser, speaking to reporters in Istanbul where he’s attending an International Monetary Fund summit, was denying a report in the London-based Independent newspaper, which said today that Gulf oil producers and customers including China and Brazil had held secret talks on phasing out the dollar in oil pricing.

    The Independent report is “absolutely incorrect” and there has been “absolutely nothing” of that nature discussed between Saudi Arabia and other countries, al-Jasser said.

  • Bart7
    another reason I think it's a good contrary indicator and may mark a bottom in the dollar soon
  • CandleStickEmUpper
    adding a unit of short ES here. My previous shorts remain (albeit being held up by a diminishing belt buckle)
  • hank30
    The balloon is deflating...
  • shortcover
    i guess us bears can hope that the final wave is truncated and doesn't crack the old highs...but the frustration factor is about right for it...
  • bshah
    Out of curiosity... What news is driving this fucking bs higher...?
  • who needs news when the FED gives free cash for watering the green sprouts on equity?
  • dollar dump
  • AS2009
    Dollar (UUP) bounced from support @ 22.6 ...
  • good eye
  • harveydent
    hey check out UNH. picture perfect IHS.
  • vision_invisible
    There is mania in the air. Even on this board.

    Suddenly valuations are going to go through the roof because our currency depreciates to DXY 70? Bullshit.

    Where is the rising wages that would allow these companies to charge the SAME or MORE. How will people pay MORE for the same product (in the devalued currency).
  • buyemsellem2000
    Very long TZA at 12.15.
    Got up late,probably a good thing. What the hell letter were they talking about on CNBC??
  • when are the freaking US peeps going to WAKE UP and see that our currency is devaluing at such a fast rate, and their 401Ks are really 201 K s or less?????
  • colonel_bleep
    Hedge funds are long, hence this morning's rumors of the dollar being replaced as oil pricing mechanism, which is bullish. Just the opposite of last year when they were short and all the rumors were bearish.
  • Turps
    Let me know if this is a long way off base but the U.S. is still the largest consumer of oil. Why would the U.S. do anything other than pay $U.S. for oil. wouldn't this just force everyone else to sell in $U.S.
  • yes, at what point does the equity tape realize a devalued dollar is bad for us. ??
  • DesertEagle
    Anything to make stocks go up and reflate the Ponzi scheme, Anna. Cheerleaders like Barron's & CNBC could care less if DXY went to 50 as long as their 401k doubled. It's all just a shell game.
  • you know my standard explanation why Joe Schmoes are not capable of understanding what we understand?
    (ref George Carlin as always)
    Plus with FED debasing currency - where else to put money? equities/commodities/stove?
  • So true David :)
  • roscoe_casita
    JPY or EUR
  • not touching carry trades for long term holdings - you never know when it will reverse, and when it will - there will be no time to get out
  • roscoe_casita
    Aye, i don't do Forex.
  • Nightwind
    Hey Anna, my mattress bank is going DOWN
  • may be you are placing too much pressure on your mattress?
  • Nightwind
    Those damn mason jars are tough on your spine
  • yea, the fluff is out :)
  • harveydent
    well the lower the USD. higher equities right? :)
    i know not the truth historically...
  • To a point, what happens when the chinese have had enough of this SH-T (they are stockpiling Gold/metals/commodities...(for a reason )
  • harveydent
    well then yours and many theories (big picture) is right and our economy hits the fan. not everyone can be as wise as you!

  • the Big Picture is the US has no game plan...the central bankers are clueless as they were in 2007, thanks Ben Burnmybutt. LOL
  • harveydent
    i wonder if i should stop pursuing an education/career in concentration Finance + IBanking.
    Actually serious question...what do you guys think? Failed career for another 5 years until we fix our economy?
  • Harvey you go for it, you could be a real asset to what we need :)
  • harveydent
    why thank you :)
  • :-)
  • They would be 200.5Ks. And no, see lazy fat-ass U.S. citizen comment below. When was the last time you saw someone get outraged (besides about american idol)??

    Skål!
  • I am livid that no one gets it they have tunnel vision with the exception of a few... Our economy will finally crash around us. But by then it's too late.
  • Woolly Llama
    Did anyone mention the raise in australian rates and its affect on the dollar today?
  • Yes. I have been tracking this one closely. Have a look further down.
  • Vardoger
    A:D 7:1

    I guess I'm tracking for a long on any pullback to around /es 1046. I won't be surprised if we paint a bull flag here
  • mattco
    If GS & JPM are huge net shorts of Gold and Silver, shouldn't the rise in the PM's be killing them?
  • they can afford it
  • IF, then yes.

    Skål!
  • Road_Kill
    I guess we are going to consolidate here for another 20 point move in the next 5 min.
  • anthem
    yeah, looks like it. This small 2 pt consolidationg doesn't look good. . .
  • there might be one more push to set higher high on hourly major indexes
  • harveydent
    anyone have insight on RIMM? its so sporadic this morning. Been in some calls since 66 few days back.
  • Out of all long RIMM looking to do a short spread soon. :)
  • peder1001
    hi anna :)
  • TheCrowe
    Harv, Anna bailed on her bull call spread yesterday near the highs. As you probably know, she's $money$, so you might bail out too. best of luck!
  • Nightwind
    Does anyone have a chart on the dollar that goes back to the 1970's. Curious to its value on Dec of 1974. My charts don't go back that far. Thanks
  • mattco
    12/27/74- DXY 97.630
  • Nightwind
    Thanks
  • bshah
    just fyi... PCLN, GS and AAPL all 3 made 52 week high today...GOD ALMIGHTY.... with highest unemployment and weakest economy, what a show...
  • dollar
    added to TZA
  • Well my call of apple to 202 (BEFORE CRUMMY CRAMER) looks to be in the cards. :(
  • mattco
    Look at the major indexes: Dow 9700, Nasdaq 2100, S&P 1055 and Russell 600. A little strange. All sitting at even levels, except the S&P, but 3 out of 4 isn't bad. What does this mean? I have no idea. But since trying to count this shit doesn't work I am now looking at other ways to trade this market.
  • bananaben
    Poor bears - you don't listen. My printing press will not allow the market to decline. Don't you get it! We're in a new Bull Market. Get it through your thick skulls! Here's a suggestion: BUY SPG, C, WFC, BAC,AIG,FNM,FRE. Enjoy - I've got your back!
  • Trader_Steve
    If you had enough brains to be TELLING others what to do you would have enough money to never need to trade again.

    We are in the mess we are with a $65 trillion+ debt as the taxpayer has created this bubble with the confiscation of the taxpayer's future. And as we have not a shortage of assholes, say hello to the rest for us. LOL

    Steve

  • and our dollar is SH-T :(((
  • DesertEagle
  • Nightwind
    Spx - possible IHS setting up with a 1070 or diagonal neckline with a possible targets of 1000-1120. It could pullback into the 1040 area and still be bullish.
  • Ooooooooh we are just below the 76.4% retrace - if we are going to dump, it has to be veeeery close
  • Road_Kill
    I guess the bright side of this action is if you like to short we have that gap down there that now needs to be filled someday.
  • Don't say someday. Today, or if not then tomorrow.
  • Road_Kill
    In a normal world I would agree with that statement.
  • went short /NQ avg 1702
  • Great, I'm not the only one still short!
  • "still"?
    I am just trading around, not taking sides
    all in all out, cash feels good 70% of the time - this market is as insane as back in 1999
  • fuw
    I also reshorted, so you are definitely not alone.
  • DesertEagle
    Me too...got any scotch?
  • I'm hoping we won't be needing a stiff drink soon. Celebration sounds good though.
  • you got to pick either one of those
    stiff
    or
    drink
  • No I am but not feeling the love Jack...the dollar needs to find some support here or we go higher.
  • pricey
    I am long the dollar so hold on tight!
  • me too, but it could hit 75.90 area first. (ouch) :)
  • Your dollar will find support. This time the Evil Cabal is on your side (CB's)
  • TheCrowe
    What would happen if a small interim rate hike was announced to strengthen the dollar? The chances of this must be awfulllll low, but just imagine the frenzy considering all the folks having a field day with the _dollar_ carry trade.
  • AUDUSD is right at my confluence-of-trendlines uncle point. This is the witching hour...
  • I think this reverses today & may have just peaked already after five waves & eight points up.

    Let's hope the correction is deeper than the advance.
  • I hope you are right, but them saying 1500$ Gold by 2011 leads me to believe that the dollar is going to collaspe. :(
  • Vardoger
    ....collapse in late 2010, 2011 for sure
  • Hi Var, agreed, what the heck will the US do then??? We look like a bunch of bumpkins!
  • Vardoger
    Suffer, and EXPORT!

    If things get really bad we could always annex Canada and Mexico, Americano currency baby! lol
  • Road_Kill
    not the only one.
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