Here’s the price we’ll buy the dollar at
FX:
The cash dollar index (which is what we follow)
rallied to the top of our target at 90.00/50 in London. The subsequent reversal
off of 90.50 this morning has yet to take out trendline support from the Nov 2
lows crossing at 90. Yet we now expect a decline to ensue once 92.00 is taken
out and we look to buy the dip to 91.00/50 on a correction.
The very clear “five wave” move is just “wave 1
circled.” A brief correction should ensue where we will add to our core position
then cover that added position at 95.
We repeat, “In a nutshell, near term we expect a
high around 92.50 then a pullback to 91.00. We are only covering a little bit of
our core longs on the expected pullback as we still see good potential for a
rally to 95 in the dollar index at a minimum, 100 at the maximum. Those not
interested in trading in and out should just stay in.”
Stocks:
The Dow Industrials broke through key resistance
at 10,600last week and the wind is at the bulls’ backs. But as we showed in
this weekend’s report, the smart money is definitely not participating. As
stocks rise on narrowing breadth will look to go short around 11,000 if the
opportunity looks compelling.
Bonds:
The larger uptrend in yields from September’s low
of 4.0% remains intact as support at 4.4% has not been violated. Yields bottomed
just as the 30-month cycle in Treasury yields bottomed which means we should
expect higher yields over the coming months if this holds any sway. Key support
is at 4.4%. Only a sustained move below 4.4% would suggest a larger retracement
at hand.
Regards,
Jes Black
FX Money Trends
613 4th St Suite 505
Hoboken, NJ 07030
Tel: 646.229.5401
Jes
Black is the fund manager at Black Flag Capital Partners and Chairman of
the firm’s Investment Committee, which oversees research, investment and
trading strategies. You can find out more about Jes at
BlackFlagForex.com.
Prior
to organizing the hedge fund he was hired by MG Financial Group to help
run their flagship news and analysis department,
Forexnews.com. After four
years as a senior currency strategist he went on to found
FxMoneyTrends.com – a research firm catering to professional traders.
Jes
Black’s opinions are often featured in the Wall Street Journal, Barrons,
Financial Times and Reuters. He has also written numerous strategy pieces
for Futures magazine and regularly attends industry conferences to speak
about the currency markets.