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Dead Cat Dollar Bounce?
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Dead Cat Dollar Bounce?

by The MoleJune 26, 2019

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.


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
Enjoyed this post? Consider a small donation to keep those evil deeds coming!

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  • Ian Naugler

    HODL!

  • evilasevildoes

    thx Mole

  • Mark Shinnick

    Its a very short term thing, but soxs, for the bear camp, its now at a bargain buy with a very tight stop point.

  • http://gerb-reloaded.blogspot.com gold_gerb

    Ian, the next Warren Buffet.

  • http://gerb-reloaded.blogspot.com gold_gerb
  • Mark Shinnick
  • http://gerb-reloaded.blogspot.com gold_gerb

    Generals Mills down 7%
    https://finviz.com/quote.ashx?t=GIS

    Kellog down 2%

    talk about soggy cereal.

  • ridingwaves

    boring, now BTC that is another thing all together…..triple off the lows…

  • Mark Shinnick
  • http://gerb-reloaded.blogspot.com gold_gerb

    sure. I better run out at get some Coin-ye while supplies last.
    LOL.
    https://www.geekinsider.com/wp-content/uploads/2014/01/coinye2.jpg

  • Mark Shinnick

    idra has a nice setup now, very tight stop potential there.

  • BKXtoZERO

    Out of DRV at 6.85 from 5.94 and 6.1 hefty size on that one…. reverse split planned for Friday so just taking this pop.

  • BKXtoZERO

    Long TBT today from 29.16

  • BKXtoZERO

    aaaaand short Crude via DWT 6.11

  • ridingwaves

    Got to see some volume run thru it, its on a lazy course to nowhere right now…biotech has been hit pretty good this week…LABU hit the 100sma and backed down 10%….

  • BKXtoZERO

    well RW… I scored on DRV and took it for now with this split coming…. thanks.

  • BKXtoZERO

    aaaand Long MOAR TVIX 19.84…. plenty of action today so I have to be right somewhere LOL

  • BKXtoZERO

    Since this is the BKXtozero show on the board the last 20 minutes, I may as well entertain you too. Here is a song I wrote in my 20s about a sweet sweet wife. I play guitar/bass, my buddy is on piano and vocals…. Bedroom demo. (I put this up for Gerb last night). See if you can tell how much Married with Children I was watching! https://1drv.ms/u/s!ArTySqA..

  • BKXtoZERO

    ha…. I am gonna PUMP YOU UP!

  • BKXtoZERO

    Try this link if it doesn’t work https://1drv.ms/u/s!ArTySqALEwTvm0F06U6kAP7XSSYj

  • Cyd

    I haven’t shorted SPX yet as there has been a hang fire on the 60 minute chart that I have been watching. It is below a down trending 5 ema but has not gone below the 60 minute lower cloud boundary as shown in chart. Once that occurs I will. The 60 minute MACD is below center line and RSI below it’s declining 21 ema which is bearish. The bulls still have a chance https://uploads.disquscdn.com/images/4302598891dadbf2a36e5518e379490e399176f1702be5e5ff1297a58852da78.png

    Cyd

  • BKXtoZERO

    bullish set up since 2am choppy flag….. BUT you never know. Kick em when they are down I always say, or at least try to!

  • Cyd

    Hello BK Also I have not shorted oil as the British odds makers had it opening higher last night for today. There link is http://www.ig.com and click UK. USO still has the potential to go to 12.75 close to the cloud. Now at a down trend line – resistance and 61.8% retracement. Yesterday hesitation at the 55 ema and 50% retracement A reversal candle on the daily and will short https://uploads.disquscdn.com/images/5dba42ff55327de1efe0fa752b0a0c74b673cd125345d77388cb07ff1764fbb1.png

    Cyd

  • Cyd

    UUP As Mole suggests to watch the dollar closely and pay special attention to in his post. At a very important inflection point The bearish diamond pattern has a target about 25.5 . The hang fire here is multiple supports 144 ema – price support and a lower channel. This is totally wait and see what occurs shortly. As stated before the 144 ema can be considered a trend reversal signal if continued closes below with the 144 ema turning down. On the fence here with UUP untll https://uploads.disquscdn.com/images/6d1eff48fa966ed7a703ea1225e643cf305646c8693a0cb70024941d86dc8b1b.png this make or break is determined
    Cyd

  • Cyd

    Thanks Chieftan for the mention and looking forward to your new project. As stated when Julie gets back we will join you in the lair every morning She wants to and I do to. Great blog with great folks
    Cyd

  • ridingwaves

    btc a beast….

  • Cyd

    SPX As you can see there are short signals. RSI breaking below a trend line and CCI a drop below support. Also the major lower trend line break – below a support and below it’s turned down 5 ema. But still hanging tough at 2925 the conversion line which is the lower cloud boundary shown 60 minute chart below If breaks below then must pay special attention to the 21 ema @ 2893 which is also a support.

    As Catracho pointed out yesterday there are levels to watch and break One leg at a time here https://uploads.disquscdn.com/images/c263529661cbafbc3648062b0b7749ebffc88892d1d58e13afb06c744ddec46d.png

    Cyd

  • http://gerb-reloaded.blogspot.com gold_gerb

    hot dang.
    Pajamas & Pancakes! at least it would make a good Morning show title.

  • ridingwaves

    I keep thinking the best way to help farmers right now is higher wheat and corn prices to make up for volume….the monthly wheat chart is bullish..

  • https://evilspeculator.com Sir Mole III

    Much appreciated Cyd 🙂

  • Cyd

    We have a downside target $COTTON 62.50 – 60 then we load up
    Cyd

  • http://gerb-reloaded.blogspot.com gold_gerb

    “Then I heard what sounded like a voice among the four living creatures, saying, “Two pounds of wheat for a day’s wages, and six pounds of barley for a day’s wages, and do not damage the oil and the wine!”

  • https://evilspeculator.com Sir Mole III

    It’s all fun and games until people suddenly can’t afford to buy a loaf of bread. Watch prices explode after the summer and heading into late fall.

  • ridingwaves

    bread is $4 bucks a loaf, $5 if you step up….I laugh at the no inflation meme of today…

  • http://gerb-reloaded.blogspot.com gold_gerb
  • Cyd

    Chieftan Talked with GG same topic. The curve ball instead of all the deflation talk by the economists and gurus who are always wrong is inflation. Totally agree.
    Cyd

  • http://iberianviews.blogspot.com/ catracho

    yes inflation is there – just not in the data governments like to use!
    House price inflation/ inflation of things you need
    Deflation of things you don’t need!

  • Cyd

    Of course there is no inflation with housing or rents.Out of their minds
    Cyd

  • Cyd

    @GG DMRC holding support
    Cyd

  • http://iberianviews.blogspot.com/ catracho

    vigilant – the rally today was all smoke n mirrors – Iran is a negative (see Crude) – got to throw a positive out there .
    Fedex – warning sign..
    see if this rally is maintained – (so far not great)

  • https://evilspeculator.com Sir Mole III

    I’m actually talking about the Maunder Minimum we are all heading into. The next 20 – 30 years will be brutal. Food will be expensive and it’ll most likely lead to a complete social/economic/cultural reset. IMO nature is most likely doing humanity a favor – 8B people on the planet is 4B too many.

  • Cyd

    Hi Last night previous thread GG – BK and I talked about Fed Ex . The trucking index $DJUSTK in a down trend and the railroad index $DJUSRR a bearish rounded top. All is not well with the transports
    Cyd

  • Cyd

    Are you familiar with the Kondratiev (sp) winter.? Same scenario with a possible major war Very interesting the Kondratiev cycles similar to your 20 – 30 years Maunder Minimum

    Cyd

  • Cyd
  • BKXtoZERO

    We retrain them to be software developers… So we can all starve and go back to paying big bucks for cereal

  • Cyd

    Now if WFC a totally weak bank can break the lower trend line that it’s been bouncing off and have commented on repeatedly along with the lower cloud on 60 minute chart. I will be a happy camper Holding WFC throughout this mess short Not a large position and waiting to add with the break
    Cyd https://uploads.disquscdn.com/images/d13aaf0f386d71a8848ef796a8f130054d9e3f26fb935c07be549ccfc59f6b74.png

  • Mark Shinnick

    What do you figure the impact of gluten intolerance has had on overall demand?

  • Darkthirty
  • Darkthirty

    Cause and effect? Did the fart make the horse jump, or did the jump make the horse fart?

  • BKXtoZERO

    The other day I posted that housing was weak even WITH low rates…then I looked at ZH and that was one of their headlines so I didn’t know if I should be happy or not.

  • Darkthirty

    Have 2 local bakeries, the bread comes off the same line and goes into different brand wrappers. Check the prices just for fun next time you hit the store……..

  • Mark Shinnick

    Its certainly cause in thickness of growth rings. It all starts with energy.

  • ridingwaves

    who knows as the far east, africa and India seem to have made up for some gluten free folks here, I tried to gluten free, then I thought even the bible promotes bread….I’m not looking to live to 100 either…

  • ridingwaves

    huge sourdough fan…so I stick with it, have a co-op bakery here that will keep me from ever being gluten free….scones are just too good…

  • Darkthirty

    #1 daughter has been looking at houses, I do the inspections. EVERYTHING we’ve looked at is rewire/replumb/new roof/new windows/sagging floors, some with asbestos. After repairs + purchase price should equal or be lower tham CMA. What a joke….

  • Darkthirty

    My mom always kept a batch going, grew up with sourdough

  • BKXtoZERO

    Well… DRV is blasting off as I planned…. Took my 16% gain because of the reverse split on Friday. I nailed UGAZ for 14% so I get to post one of these old BK posts as I am doing well and having fun. It’s been a while but……..
    https://uploads.disquscdn.com/images/34ea3bf709fa064f7f43c7f0b62d373445fe38cb65359edfad5779cab6666175.jpg

  • BKXtoZERO

    I am GF… Cherios makes 5 gluten free versions so there must be demand. I can eat EU wheat but Amerikan wheat makes me sick. I think it is because they spray roundup right before harvest here to speed up and even the browning

  • Cyd

    Houston We have a break below the 60 minute cloud But Spy selling volume weak Who’s on first .. Who’s on second
    Cyd

  • ridingwaves

    LABU at trendline support, Dive, Dive, Dive alarm ringing loudly…better hold, hold, hold here https://uploads.disquscdn.com/images/31ccc0f3759c3dbc1937d266b06704e0d77cefeb4aac2109a50d132c6d912104.jpg

  • Mark Shinnick

    Yes, agreed, right in around here.

  • BKXtoZERO

    I am back to account highs of last year and breaking out I hope… My account has been at a level of resistance. Up 10.5% this year atm. I like my short oil long TBT here but watching my tvix carefully. Hoping for solid break out for old BK

  • Cyd

    Also @ double mid bollinger band support and very small bounce watching thumbnail inset https://uploads.disquscdn.com/images/ac8aa556b63b6ab2348a6c7938cc4fd10b648948f1910340f1ab04cf20ed61c4.png

    Cyd

  • ridingwaves

    great example of a non tariff affected sector getting slapped around….because the big boys could….

  • Mark Shinnick

    Yeah… 3x shenanigans too.

  • Mark Shinnick

    That I suppose helps you control the inflammation ens variables.

  • ridingwaves

    probably going to be mixed into debate tonite….drug pricing and medicare for all….if they want drugs to be cheaper, eliminate the FDA clinical trial model as is….

  • Cyd

    USO returning to the scene of the crime which is common, @ multiple resistance points with a spike high today Overbought also @ 233 ema with RSI @ 60 which is usually resistance following a downtrend with RSI reaching 30 or below Now shorting USO With ya now BK https://uploads.disquscdn.com/images/86b41ca32439fe9ca2c82fc720c029d19f8eaf8688aa2e662db439745fab2ebc.png

    Cyd

  • BKXtoZERO

    It only took you 2 more hours… You have to get up pretty early in the morning to get up early in the morning.

  • Cyd

    Taking extra long lunch today too
    Cyd

  • BKXtoZERO

    I am in my element… Fried Bindi (okra) Saag… Nice Biryani…

  • BKXtoZERO
  • Cyd

    Holding off shorting SPX with 60 minute chart oversold I think that there will be a bounce shortly to a lower high then short. Always best to short a lower high
    Cyd

  • Cyd

    WFC Look at this F%$#&&# thing bouncing off the lower 60 minute cloud I should be day trading it Gotta have patience https://uploads.disquscdn.com/images/c6a7b383669d85f6900a7afa925d32f872c03e48a1f1ed41f77b1406510acf02.png

    Cyd

  • BKXtoZERO

    Closed tvix from today big 9 cent gainer. Holding other portion

  • Cyd
  • BKXtoZERO

    I just saw HD on the way back from lunch! It says always on the job but no posts from him today. https://uploads.disquscdn.com/images/60aaa2322e20145fa0a15d6d67ec8876fe8c977eca042dda6a54d5d68cd434d6.jpg

  • http://gerb-reloaded.blogspot.com gold_gerb

    wherever he is, I’m sure he’s…..(wait for it)……HWB.
    😉

  • http://gerb-reloaded.blogspot.com gold_gerb

    barely.
    😉

  • Cyd

    Mr G Belly on up to the bar SLV this is completely orgasmic I had a 14.30 target but went to 14.60. Pullback at raff regression – resistance and 61.8 % retracement The 1st pullback at 50% retracement and a blue parallel channel drawn. Rally confirmed by volume – OBV – Accum-Dist.and CMF The 21 ema crossing above the 55 ema.Looking to jump in @ 14.01 – 14.07 OR 14.21 the conversion line and a support

    Went above cloud on daily chart. You can see the baseline at 14.01 and upper cloud.
    !4.21 OR 14.01 – 14.07
    Did I say orgasmic or what !
    Cyd https://uploads.disquscdn.com/images/dffbf87b2227fe7b2959b0fba1a0532948293dab2f7f7d5b73117f626ad4949f.png https://uploads.disquscdn.com/images/12e72e643720d122f847fb84268c8b993b55cb2b1e6567544a6bb536becf3521.png

  • Cyd

    The daily cloud to the riight has turned green which is bullish
    Cyd

  • http://gerb-reloaded.blogspot.com gold_gerb

    https://disqus.com/home/discussion/evilspeculator/ten_years_on/#comment-4508460329

    as I said 7 days ago. “crossing the median is a good thing”.
    a gap up, I could consider follow thru. but at this point.
    it’s just drowning the shorts.

    -GG

  • http://gerb-reloaded.blogspot.com gold_gerb

    ps. the SLV to $BKX ratio sucked wind today.

    BTC is where it’s at.

  • Cyd

    It’s called a positive feed back loop Not a creeper trend yet. Pullbacks are a must to buy I missed the 1st one wanting the rally to prove itself and now it has. Another indicator of a trend change is when the 8 ema crossed above the 55 ema with CMF positive or in this case green

    Cyd

  • Cyd

    A trend change. Keep it in your log When 8 ema crosses above or below 55 ema with CMF going negative or positive. Works any stock or index
    Cyd https://uploads.disquscdn.com/images/fb0be53cac3c956577816eecd8f96d4c4708bd181b1151761d14d33bc8cd205c.png

  • http://gerb-reloaded.blogspot.com gold_gerb

    it’s not working for me on $gold.
    CMF is garbage.
    However, that 8 ema across my supersecret SMA median? https://uploads.disquscdn.com/images/a07f5fa8e4b12773ed7bfb3de295929ccb7d47357e026e63ec7c32ed93805b41.png
    golden.

    edit: RSI 80 is usually a great indicator.

  • Cyd
  • http://gerb-reloaded.blogspot.com gold_gerb

    zoom into May, there was 2 days, that failed. CMF was close to zero.

  • Cyd
  • Cyd

    GG RW’s LABU Nice rounded bottom base (We know how much you guys like rounded bottoms). Bounce today off mid bollinger bands. Could go down to rising trend line https://uploads.disquscdn.com/images/fff4552a8e805280b205987c0d777abd544562d075c95ecc94c0c2b36d2383af.png . Either a reversal here or the trend line and popping above resistance gonna lick my chops A rally here with 5,3,2 stochs oversold and 8,5,3 stochs turning up at 50 Ooooh Ahhhh

    Cyd

  • http://gerb-reloaded.blogspot.com gold_gerb

    with my profits, I will get a gold AAPL watch.

    https://www.youtube.com/watch?v=wFnzFZvD3tM

  • http://gerb-reloaded.blogspot.com gold_gerb

    ugh, those kind of moves make me throw-up.

    hey, I’m gonna jet. Got some personal issues, don’t want it to bleed out.
    see’ya tomorrow.
    -GG

  • Cyd

    Also see the nice strong candle with strong confirming volume on June 17. That is called a SOS sign of strength and jumping the creek (resistance)The slight pullback now is called back to creek
    Cyd

  • Cyd

    BK As I type the British odds makers have OIL opening lower tomorrow Yeah baby They have DOW – FTSE and DAX opening higher tomorrow Could change overnight but so far as Julie would say Yes Cigar I have not shorted SPX yet But we will nail the lower high

    Cyd

  • BKXtoZERO

    I don’t pay much attention to book makers… that is what markets are for.