King Dollar Stomps Eurotrash

I’m having a rather brilliant morning down here at the lair. Imagine my silly grin as I am watching King Dollar stomp all over the monopoly money they’re still pushing as a possible reserve currency on this side of the Atlantic. Honestly I fervently hope Merkel remains glued to her chair all the way into October 2021. Because if that happens the Euro is most likely going to trade at pennies against the Dollar. That is if I hold out this long over here as things are steadily starting to turn South on the Iberian Peninsula. In the meantime I remain long political drama and short the Euro.

Please tell me you took this long position on the 8th because my campaign instructions were rather specific. Despite a rather conservative stop this sweet puppy has already pushed to 4R MFE, allowing me to advance my trail to near 3R. And hopefully with more to come in the week ahead.

And here’s the EUR/USD in all its gory. Major breakdown below 1.3 which basically opens the floodgates and may get us back below 1.10 again. The only hope for the Euro at this point is an immediate and forceful bounce higher followed by a push < 1.16.

With Italy once again at the brink and Britain in political turmoil I don’t think the odds of that are very high, but that said let’s remind ourselves that common sense usually has very little to do with valuation. In other words, let’s not count our chicken before they are hatched.

Our USD/JPY campaign is also looking strong with my trail now at 1.5R and a possible break out formation in the works. To be frank however I think this one will take its merry time before it finally takes off. Which is fine by me as I’m a patient and discerning market megalomaniac.

Now since I’m double exposed on the USD side I just took a long entry on the AUD/USD. Possible floor pattern here, especially IF it manages to bounce > 0.73. This campaign addresses the fact that every time my smugness level is starting to balloon beyond its historic 2nd standard deviation the accumulation of a hedge or two has usually saved the day in the ensuing smack-down Ms. Market was happy to serve me.

Equities are starting to look a bit more iffy which I don’t really mind as I already got kicked out of my long campaign at 2771 and a little over 1R in profits. I was tempted to suggest a long position here but think it would be wiser to wait for a conclusion of this SL test. It very much looks like we are getting the Orange Pig scenario (i.e. inverted H&S) I talked about last week.

Crude continues to attract sellers and couldn’t find a bid in a white collar prison holding two fistfuls of pardons. I don’t think that we’re going to see much relief here until the 57.50 mark. In the spirit of full disclosure I should highlight the fact that I mused about a possible push into the 90 mark by the end of this year and obviously I was bloody wrong on that one.

Clown Alert

Which is really what we all should continue to remind us on a daily basis. Some silly clown wrote me an email last week insinuating that I was an idiot for being long equities. And today’s stop out shows he apparently was on the right side of the tape and I on the wrong one. Aside from an apparent lack of grace, class, and basic manners, what Señor Payaso is obviously incapable of understanding is that I don’t ever care about being wrong.

For I am the first one to admit that I don’t have a crystal ball and that there are others who may be better at reading the tape than me. But few people beat me at the game of playing the odds (outside of Vegas), which is exactly what this racket is all about. Trading for a living is an activity positioned exactly orthogonal to holding strong opinions about future price movements. It’s not that you are not allowed to have opinions, that’s basic human nature,  but you simply keep them away from your trading activities.

Once you learn this most difficult lesson of all, and by learning I don’t mean just intellectually understand but truly grasp and internalize it, then you are ready to proceed to the next level in your trading career. Unfortunately it seems that only a small minority of people out there are capable of doing so, over the long term leading to massive losses and eventually account blow ups.

Which is the very reason why the great Maker has put me, the lowly market mole, in place: To preach the gospel of trading survival, keep you guys on mission, and slap you around a little whenever necessary. An awesome responsibility but one I have embraced happily. Now go and sign up for a membership, you slacker!