9 replies to this topic

[hedgehawk]

Entered short today via September SSO 32 puts at 2.25. My reasoning is that the FED givith and the FED taketh. The BDI index rolled over this week. The Chinese are done buying commodities at least thats what the BDI says. 2nd I believe this rally in the dollar is for real and will last more than 1 or 2 sessions. Crude Oil traded sideways all week and there are cracks in the limestone foundation. Last we get the FED this week and I think the dollar rallies as the US will be the first to exit QE as may be hinted at the FED mtg. I think the correction started this afternoon target 870.

Edited by hedgehawk, 07 August 2009 - 07:37 PM.

[thespookyone]

Nice take, and good play, imho.

[inamosa]

Interesting analysis Do you have a target for the DX, out of curiosity? thx

[goldswinger]

Hedgehawk, I agree with you on everything but I was interested in finding out if you consider the BDI index as an early warning sign on the SPX turns given that the BDI has in fact turned, I arrived at my decision by a different method. I am currentlt short the OIL sector via the Canadian Horizons HGD ETF. Thanks, GS.

[hedgehawk]

For commodities, I believe right now the story is the central banks, their respective currencies and their monetary policies. The US, weakened the US dollar which makes sense since that is a form a protectionism as it has the same effect as it encourages the buy American goods theme as foreign goods become more expensive. Now the foreign currencies are getting at the top of their trading ranges against the dollar the other central banks are taking notice. The most recent example is when the BOE surprise markets this past week by extending their QE by 50B billions, triggering a strong fall in Gbp. US demand for foreign goods is not going to improve if their currencies are to strong. Foreign central banks don't want overly strong currencies as that is a drag on their economic recoveries. Now that China is cutting back on commodity importing (as reflected in the BDI), this is not supportive for the AUD. The play on a rolling over BDI, short the AUD!!! The Euro ie the anti dollar can do nothing to tighten and in fact may loosen as they have the weak eastern europe dragging them down. The Canadians are talking up prospects of QE to take some wind out of the Looney. Canadians are not interested in currency parity as that would not help exports to their #1 trading partner the US.

Edited by hedgehawk, 08 August 2009 - 08:52 AM.

[hedgehawk]

Interesting analysis

Do you have a target for the DX, out of curiosity?
thx

200 ema at 81.50 for first leg then a reaction when it is hit.

[hedgehawk]

Hedgehawk, I agree with you on everything but I was interested in finding out if you consider the BDI index as an early warning sign on the SPX turns given that the BDI has in fact turned, I arrived at my decision by a different method. I am currentlt short the OIL sector via the Canadian Horizons HGD ETF.

Thanks,

GS.

I dunno about SnP I think when the BDI changes direction we need to paying attention. I think long commodity players tighten up stops when they see the BDI roll over. I have some other stuff that says crude oil is going down hard in the next couple of weeks and maybe early as Monday.

[hedgehawk]

Nice take, and good play, imho.

Thanks Spooky, I think price wise we are very close not sure on time though so I went out to September.

[hedgehawk]

[goldswinger]

This is a puristic Elliot wave view of the dollar chart without regard to the use of the printing press. I don't consider myself an Elliot wave expert but I do have a pretty good knowledge on the subject and what I see in the Dollar chart above is a clear running wave 4 correction of the 1-2-3 advance from March 2008 where the B wave hit a slightly higher high than the end of wave 3 in mid November 2008 and has now completed its wave C with 5 waves down from the top (to complete 4) and is about to embark on a sharp wave 5 to complete its A wave up on the drop from the highs @121.29 in 2001. It seems like slow motion but if it had a drop of about 7 years, a 4 to 5 year ABC correction would not be unreasonable in Elliot terms. This correction started in March 2008 and if in fact we are doing a 5th wave, it might last 2 to 3 months. That would make A about 18 months long. This would be followed by a B down (another 18 months) and then a C up (18 more months), then a huge plunge probably lasting a couple of years. This would take us to 2014 or so, before the dollar or whatever replaces it starts moving up again. Coincidentally, this is the year that some people believe the economy will start growing in a healthy way again based on other cycles/ studies and so on. GS.