Mnuchin’s Falling Sword

Earlier this morning Secretary of the Treasury Steven Mnuchin doubled down on well timed inflationary comments he made yesterday at Davos thus pushing the Dollar over our technical LT edge and tumbling even lower hence. This pretty much puts the death knell tp any remaining hopes for a Dollar bounce in the near future and puts the DXY on a trajectory toward 87.5 and most likely lower.

I hope you’re not planning any extended road trips this spring or summer because you will most certainly start feeling it at the pump as crude is already pushing > 66. And while you’re at it you may as well turn down the heat a little as natgas is breaching its 3.0 mark and may now embark on a good old fashioned short squeeze (who can afford pumping NG at three bucks??).

Whatever you do, don’t step underneath Mnuchin’s falling sword as everyone hates the Dollar now and buyers are few and far in between. By the way I’m raising my monthly Gold subscription rates to $1000 now, which most likely won’t be enough to pay for decent toilet paper over here in Europe by this summer. [yes I’m kidding – kind of…]

Not surprisingly our EUR/USD campaign is unfolding nicely and I just raised my trailing stop to the recent spike low which roughly equals 2R in paper profits. You may want to do the same.

The VIX however threw a little monkey wrench into our IV short squeeze aspirations. That little spike higher thus far isn’t bearish (for equities) yet but it was sufficient to kick us out of our ETP campaigns:

Fortunately we had already wisely advanced our stops to break/even. Now I didn’t look at my ratio charts but it looks like the VXX is once again trailing the VIX and this may be another short entry opportunity. However I don’t enjoy getting into these setups unless the VIX is at extended levels, so I’ll have to pass on this one.

Here’s the XIV stopping us out where we entered. If you’re an IV trader you may want to watch this one closely for another long entry opportunity.

New delicious setups just popped out of the oven – come and get them below the fold…

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