Dead Cat Dollar Bounce?

The Dollar has been in free fall over the past week after the Federal Reserve hinted at the possibility of multiple interest rate cuts over the remainder of 2019 and perhaps beyond. In its statement it said that it was prepared to lower borrowing costs to counter slowing domestic growth and sluggish inflation. Clearly to the U.S. Federal Reserve a median home price of $227k, over 4x that of the median household income of $59k, is not high enough and needs to be inflated.

Of course this is not the first time the Fed attempts to slap the Dollar lower which is easily seen on the daily panel above. Whether not the current slide will devolve into a more sustained sell off remains to be seen. The financial MSM is rife with bearish sentiment regarding the Dollar, which is usually when I start looking for long entries.

The current formation on the ST panel is a bit premature but fast counter rips are known to happen after fast Fed induced sell offs. I am prepared to risk half an R (0.5%) on a breach > DX 95.9 – ISL would be placed < 95.336.

If this one fails then a drop to a bit below 95 is most definitely in the cards, which is where we would re-evaluate the situation for a possible long play.

Speaking of dead cats, my E-Mini campaign is a goner after touching its trailing stop at 0.75R. Which is a shame as the current configuration suggests an impending snapback. However unless you smelled a rat yesterday night (yes – more animal references) then you most likely missed this one. So did I.

Crude still on cruise control and I’ve slightly advanced my trail to 1.5R. Not much to say or do here until this one has run its course – the looming 100-day SMA near 59 may accelerate the finale here.

I’m not feeling it with the gyrations in ZB. Reason being that intra-day volatility is on the increase AFTER a long run to the upside. The probability of a correction is increasing – which in the current scenario lowers the odds of continuation higher.

If this would happen near recent lows then this may justify a lottery ticket in anticipation of a break out higher. But an increase in RV after a long run higher usually leads to a correction. I was very tempted to pull out here near break/even but then changed my mind. Let’s see if fading my instincts is going to pay off.

Public Service Announcement

First up I’ve been really thrilled with all the activity in the comment section during what is arguably the least prolific season of the year for us traders. Special thanks to Cyd – a new contributor – who has picked up the slack for Julie who’s currently on vacation. And of course all the regulars who have been keeping this place humming for over a decade now. You guys rock.

Now as you know over the course of the past year I have been secretly laboring on a new project behind the scenes. It’s been a colossal effort to be honest, one that has taken up most of my free time (evenings, weekends) starting in early 2018 until now.

So, not only will I share more about it tomorrow but I have also decided to give everyone here at Evil Speculator the opportunity to take advantage of an early introductory offer specially reserved to my crew. I hope you guys will love it but I guess I’ll know for sure tomorrow.