This Rally Is Right On Schedule…Here’s How I’m Trading It
FX: Last week we took
a number of stabs at the longs side of USD/CHF which we were able to scalp
profits on then move stops up to our entry levels around 1.2445, which kept
getting hit. Last night we went long again, this time at 1.2485 and the
subsequent rally to 1.2550 this morning has allowed us to move our stops up to
1.2485. Once again, we were a bit early to the party, but we think the turn we
were expecting is now in.
Subscribers should look to our weekly
newsletter sent out on Saturday which updated our near term as well as 12 month
outlook for the US dollar. Readers may recall that all month we have called for
a pullback to the key 87.00 level where we repeatedly said we would look to buy.
Below we show Friday’s forecast followed by today’s market action in the USDX.
We think our rally is now on schedule.
Stocks: The markets
extreme fluctuations look ominous. The August-October months are historically
the worst and considering that the S&P500
(
SPX |
Quote |
Chart |
News |
PowerRating) reached our key Fibonacci
target of 1245 this month suggests to us a downturn lies dead ahead. Meanwhile,
the VIX
(
VIX |
Quote |
Chart |
News |
PowerRating)continues to climb since we added to our position over two
weeks ago.
Bonds: The impulsive
looking decline in yields from key resistance in the 10 and 30 year contracts
suggests a move back to 4.2% for the 10 year. This level needs to hold to stave
off further decline in yields (rally in bonds).
Regards,
Jes Black
FX Money Trends
613 4th St Suite 505
Hoboken, NJ 07030
Tel: 646.229.5401