Something interesting is happening in the DXY this morning:
Remember the two inflection lines on the DXY I posted about yesterday?
Charts and commentary below for anyone donning a secret decoder ring. The rest of you guys will have to wait until tomorrow – sorry. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
I had mentioned that we need to see a breach – either to the upside or the downside. This officially triggers a long trade and a conservative stop would be either Tuesday’s or Monday’s low.
Now let’s see if this one is for real. I expect a little push higher followed by a re-test. IF this thing gets going we could see a fast move to the upside – big emphasis on the ‘if’. Dollar bears would do well in trying to suppress a break out as a short squeeze could do some real damage here – after all Dollar bulls have been below the 5% mark for over a month now.
I do like the setup here as we have a nice cluster of support that has been painted for the past few weeks. However, we all know who’s trying to kill ole’ bucky, so let’s not get too giddy here. But a breach is a breach, so let’s not over think it – you set a stop and wait for the market to either prove you right or wrong.
Assuming this pushes higher I don’t imagine equities will follow right away – maybe we’ll see some sideways tape for a while. Last December, after ole’ bucky made it out of its foxhole equities took a while to catch up – seasonally I don’t expect much in terms of fireworks on that end. Admittedly that is an outlook I would like to be proven wrong on.