As the Dollar Turns …
October 27th, 2009 Posted in UncategorizedSo do the markets of our lives. Wait. I think I just combined two soap openings but I don't watch 'em so who cares.
But it's a good description of today's morning reversal following a lower than expected (act. 47.7 vs exp. 53.1) Consumer Confidence number.
Contrary to all the optimism on Wall St, at the Fed and Washington, this recession isn't over. Americans are pessimistic about keeping their jobs in this environment. If they keep their jobs they're worried about their wages being cut. And if they do lose their jobs, what next? There are no jobs.
Yet, perhaps this negativity is a positive for the Greenback which is the only reason I can explain why DX Z9 spiked higher and equities and commodities spike lower on the lousy Report. Flight to safety? Or ... or DX Z9 is getting ready to move in unison with equities and commodities on hopes of a positive future.
Regardless, those receiving my pivots and trading levels via email might remember my suggestion on October 21, 2009 where I stated,
"I also think selling at the money/out of the money puts and/or buying calls on DX Z9 is a good idea here (to get long this market). If you can't pick a direction, buy an at the money straddle. Something is going to happen in this market soon ... my bias is bullish."
10/21/09 Close on DX Z9 was 75.11 - Today 10/27/09 Closed at 76.415
This move represents a one week gain of $1.305 or $1305.00 on the Dollar Index future contract.
Conveniently enough there is resistance at these levels, all the way up to $78.60. Remember longer term downtrend in this market is still in tact.
Why convenient? Because the S&P (ES Z9) finds support at 1050/1060 level, which is within 10 pts of today's close of 1060.25 - and longer term uptrend in this market is also intact. Also note that ES Z9 recently broke out from within this same range (approx 1055/1060 on 10/8/09) to make a 3% move higher. Yes, you can infer that I feel a bouncing coming.
That being said, is DX Z9 going to meet resistance and sell off here causing equities and commodities to rally again? Or is this inverse relationship ready to give way to a mutually beneficial correlation? I'm ready to argue for the latter.
Stay tuned to As the Dollar Turns ...
Trading Levels - Wednesdy October 28, 09
ES Z9 - PIVOT 1062.17; YM Z9 - PIVOT 9840.33; NQ Z9 - PIVOT 1727.25
TF Z9 - PIVOT 589.23; QM Z9 - PIVOT 79.03; QG Z9 - PIVOT 5.26
If you're interested in receiving the complete version of my pivot and trading levels via email please contact me at ruria@manducatrading.com or call toll free at 866.312.4965.