A rising tide floats all boats, as long as you’re swimming in equities apparently. Currencies, futures, and bonds however have been selling off hard since the launch of the post election Dollar rally. How far it’ll manage to run remains anyone’s guess (although I have some ideas) but it seems that it may at least be taking a little breather – for now that is:
Make no mistake, the real loser of the 2016 U.S. presidential election was not Hillary Clinton. No, it was nearly the entire Western mainstream media which up to the final moment last night clung to a political fairytale it tried so very hard to convince its readers over the past two years. No matter whether you are a Hillary or a Trump supporter and no matter how you feel about the 45th president of the United States as a person, this is something that should deeply upset and worry you long after your current euphoria or depression has subsided and given way to your daily routine.
On Monday morning, sensing that a multi pronged strategy was needed, I presented you with four distinct scenarios which I separated into convenient color codes according to their respective trading directions. After a brief spike up we were treated to Soylent Orange which quickly and somewhat unexpectedly turned into Soylent Red late last night. To repeat, what we were waiting for was a quick drop below the green diagonal, followed by a retest of ES 2140.
In the end it’s all about the money and more specifically what happens on the currency side. Although Forex trading has effectively been turned into a small sideshow in the United States, due to stringent Dodd Frank regulation that mainly affected retail traders, it would be a mistake to not pay attention to what’s happening on the currency side. And what I’m seeing across the board, on a long term basis, is rather disconcerting.