“The Bernanke” ROCKS the dollar and other interesting side effects…

If you were rocked/surprised/knocked off your/feet or simply shrugged at the dollar’s tumble down the backside of the mountain, you now know that the complexion of the taper scenario has changed, but truly has much else?

It’s a interesting morning of disappointment for dollar bulls alone. The Nikkei was up on Bernanke’s “taper-later-gator” comments, the U.S. equities markets are certain that they will have all the crack, errrr, liquidity that they could want to continue buying, heck, even gold is up, and bond bulls got a six month reprieve.

So now we must recalibrate WHEN the taper will occur because you know it will – and it seems that the market is not *worried* about it until next year. Fact is that despite the sell-off, the U.S. Dollar Index is finding support so frankly only near-term bulls were shaken loose from the tree. The charts reveal that 82.60 is a common level from the previous late-August highs of 2012 and we have a gap close overhead at 83.69.

I run through all my open positions (including the loser on my books) and I discuss the individual currency stories that are still intact despite the scenic route they will be taking courtesy the Fed. Perhaps I’m old school, but I liked the singular voice of the Fed versus the confusion of an era of Fed transparency and the chorus of Fed voices that I wish I could mute. It’s truly NOT doing us any favors my friends, and yet, no one seems to be able to say so…

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  • PipMeHappy

    Hello Queen Cleopiptra, thank you for this wonderful article… Yes, the utter chaos on the markets could probably fade in line with the bigger trend of USD strength that we saw recently…(although I do not have divining powers, predictably)… I agree with you that Bernanke did not say anything new, which is why the market reaction seemed (I stress, SEEMED) so extreme… In the end, nothing new was said… And when Bernanke said in June that the scaling down (tightening) of the QE3 programme was data-dependent (unemployment etc.), among other things, the market went Yippeeee on the USD, which gave the Euro a thrashing, for example… But yesterday? Ka-Boom… Same conceptes, same meeting minutes, but opposite reaction… I am just not going to spend more time reasoning with the market on this, because it serves me with no guidance… I will continue to look for a risk-aversion scenario, S&P/Equities drop, dollar rise, USD/JPY and EUR/USD fall… That is what true fundamental thinking was telling us up to yesterday.. I cannot see what Big B or the minutes said differently from the 19th of June… So I am just going to go into my little pod of rational sanity and leave the market howlers go rampaging through the charts for a while… They will pass, and then we can even think about trading Majors again!!

    • jamil

      even though the boss want to intervene and keep the momentary police hold for the time being, but big dogs wont accept to let the dollar down !!