Drainage!

We’ve got drainage people – and I’m not talking about equities. Rather it’s the Dollar that’s starting to look weak and may set itself up for a correction. Let’s review:

The hourly panel reveals some bottom spikes which thus far have been reversed. But as I already pointed out in recent updates – the greenback is now facing the 100-day SMA and there will be blood as the easy coin has been made.

Meanwhile over in the woodshed we’re seeing now signs of life – since I tok this snapshot we are back at the 25-hour SMA. I continue to submit to you that this is the line in the sand that leads us lower. If the spoos breach higher then I will close out my shorts and start taking on long positions. If not then see my target area on the daily panel.

This is my NYSE volume ratio chart and the downtrend is starting to look a bit iffy right now. Not nearly as much selling pressure as yesterday around this time. So be careful and watch the E-Mini for early harbingers of a surprise ramp.

Another update on our EUR/AUD trade: After yesterday’s near perfect entry we have no breached a daily NLBL. This means I’m keeping my lottery tickets in the running. On a retest I may actually load up on more.

More below for my intrepid subs – please step into my lair:
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Not a boatload of setups today but I found a few on the FX side: Here’s the NZD/USD which is now a short as we have slipped below the 100-day SMA. The 25-hour is now our line in the sand, simple.

GBP/USD also looking like a sell here. Watch that 100-hour SMA which was retested today and failed ignominiously. I am short here with a stop above the 100-hour, which is fortunately falling, unlike the 100-day.

EUR/CAD above the NLBL and the SMA and it’s holding – that’s a bonafide long, although if you’re not in yet, don’t chase it as we have seen some long candles here. Best to wait for a little shake out and then get long.

CAD/JPY – I heart this setup!! Make me a t-shirt! Seriously, we are back at the resistance line after shooting the bears in the kneecaps. I would love to see a push higher here and the NLBL will be our trigger. Until that happens I am actually short but hoping to be stopped out so that I can ride the elevator up.

Keep it frosty guys and don’t let your emotions or rational mind play tricks on you (especially the latter). Always let your winners run until target or your stop. Ignore the noise and especially stay away from lofty predictions. In other words – keep it real. By the looks of it we’ll get a technical reason to take profits soon enough. But if you have held out all the way down to here then my hat is off to you! Discipline and hard work pays after all 😉

Cheers,