Looking for the next entry points for the dollar? Here’s your road map…
FX:
Readers will recall that two days ago we took 1/2
profits from our long USD/CHF position at 1.2670 and have moved our trailing
stop to our entry level of 1.2550. Since that time it appears that USD/CHF is in
a textbook “wave 4” consolidation pattern which means day traders may look to go
long at current levels of 1.2675 for a move to our target of 1.2800/50. But only
a move above 1.2700 would confirm the next move higher today. Meanwhile, the
euro fell below channel support yesterday at 1.22 and is testing the underside
of this same line this morning at 1.2225.
Recall that we have said for two weeks now that
“Our work with Elliott Wave and seasonality both suggest that we could still see
the next leg up in the dollar index towards 89.00 in the coming days to weeks
before the possible “September Mini-Crash” scenario we have been talking about.”
So it is with a bit of marvel that we look at the chart below to see USDX
charting out our expected path.
At this point, the further rally to 89 is like
trying to squeeze the last bit out of a lemon. As of now, a reversal can occur
at any point. As subscribers know, our skill lies in identifying key pivot
points that give trade setups to follow. Being able to trade it effectively is
all the reward we seek.
Stocks:
No change: This weekend we said to expect a
bounce off of the 1,200 level. As long as this holds we favor a continued
correction for the next couple of weeks followed by a break below here which
will see intensified selling pressure.
Bonds:
No change: As we have said for the past few
weeks, an expected decline in stocks would likely force more players to go long
bonds, which they are doing now as the 10-year yield pushes back to 4.0%.
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.