Acess Denied!

You can’t say that the greenback hasn’t put in a rather valiant effort but in the face of continued Fed stomping I am having my doubts that we’re going to see a breach above our LT resistance line:

Considering the facts at hand it’s clear that a strong Dollar does not rank very high considering the Fed’s continued policies of quantitative easing. Yes, there was some jawboning a week ago suggesting that they may cut down a little on their monthly bond purchases sometime after the summer. But as the saying goes – don’t worry about what they say, pay attention to what they do.

Soberlook posted a pretty good piece on the subject and in a nutshell a ‘tapering of monetary expansion’ down to $85 Billion and then $60 Billion would have very little effect as depicted in the graph above. Besides, as long as the Fed continues to print faster than the ECB I don’t expect any miracles on the EUR/USD front and that diagonal may just be a good point to accumulate short positions. Wish it wasn’t so but it is what it is.

The VIX buy signal is probably going bust today – unless there’s a late day selloff and a close below 14.27.  This of course leaves the door open to all kinds of shenanigans next week and unfortunately  there’s not much to hang our hats on right now.

As you know equities remain range bound and I concur with the musings of one of the commenters in the prior thread: I‘m not trusting the spoos till we’re outside of last week’s range (1632/1686), they seem to be moving just enough to take out stops and turn around to take out the others, bouncing around 1648.5 (near old daily NLS coincidentally), rinse and repeat. It will be interesting to see how next week plays out after an inside week.

I frankly couldn’t agree more – the current tape appears to be a honeypot period designed to shake out a few weak hands. Great for swing traders but I’m sure some of you more directional players are feeling the pain. FWIW – technically speaking  it would be very helpful to see a more thorough sell off. Trading uni-directional markets is a lot tougher than it seems. And it frankly sucks blocks for financial bloggers 😉

Per our RTV Sell signal as I’m sure you’re wondering: Scott’s (and Ivan’s) Protect R money management rules stipulate that it has to produce at least 1R after the third candle. That third period concludes tonight and as you can see we haven’t gone nowhere fast. Thus, according to our rules (and not our emotions) and barring a late day sell off putting us below 1R (< about 1615.75) I plan to close this one out and call it a week.

And I guess that’s my segway – enjoy your weekend!

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Cheers,