As warned, the dollar held onto support and started to strengthen which helped weaken the markets today. The same thing could be said for the Euro, but instead of support, resistance helped weaken the markets(as mentioned by Tim)
VXX breaks resistance near channel support
TLT breaks out of short term resistance but keep in mind we broke out of the bigger support…
However early in the morning my system has given me a sell sign at last.. in which I told the bears who were getting burned with their shorts all last week, that they finally they have a chance.
EDZ, Emerging Markets Bear ETF bounces from support
TZA Small Cap Bear ETF retests resistance…lets see if it will hold tomorrow.
I mentioned on the weekend update, financials were still lagging. FAZ still on clean support and holding.
SPXU held clean support Friday and of course, we catch a bid.
DAX =clean
BEL20Index
IBEX-35 Index
Iceland -Again, something is going on there…
My chart/perception is a little different compared to Eskandar on crude oil.
Again this chart shows why you need confirmation of at least one day before you act. But keep in mind you need a confirmation tomorrow as well.
The U.S. Dollar Index RSI's H+S target has been met.
The Dollar obeying the rules of Fibonnaci
So again not much change from the weekend update. Just keep an eye on that U.S. Dollar because it will tell all of the deflation trade/Inflation trade…I have been saying from September to keep an eye on it and just when you think you know the direction, the markets keep you guessing. For example once you think the dollar breaks out, it reverses at the same time the U.S. treasuries reverse and stocks bounce… However once dollar holds support, risk is off as you can tell from today's action and we get a reversal of everything.
Where do we go from here? I say let the markets form a clear chart pattern to trade upon on the daily. Until then, scalp for quick profits/swings. The lucky index is currently sandwiched between support and resistance, but if I had to take a bet, I think it is about to break down, which will mean we will get a correction soon… And the Evil Index is currently still in its lower middle channel…. Until the Evil Index gets back above the middle channel, I am not too worried ……yet.
2 Routes from Here———————————————————————–
1. Deflation trade=Dollar holds that support viciously and huge liquidity crisis like 08 in which everything gets crushed…only good assets to hold these times are the Dollar and U.S. treasuries…and short everything else.
2. Inflation trade= Sep 2010-January 2011 type of trade.
