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"A product of the untalented, sold by the unprincipled to the utterly bewildered.”

                               Al Capp (of abstract art)…think derivatives!

FX Trading – Dollar correction time? Finally?
If we could only forecast the stock market, then we’d be able to forecast the dollar—it seems.  But we can forecast either of them—we can only make probability bets on both.  And those probabilities are all in our head—guesswork at best there too.

But, based on Friday afternoon’s huge reversal in fortunes in both the stock market and dollar, and adding in the carry-though today (stocks higher globally and buck bashing) on seeming euphoria over President-elect Obama’s self-expressed gargantuan stimulus package that will surely get the US job market moving again, it looks like stocks could stage a decent bounce—here and elsewhere.  That would mean a decent correction in the dollar.

US$ Index Daily:  First Fib from the July dollar blast-off point comes in at 8194

Dow Jones Industrial Average Daily: 28-day moving average has been strong resistance.

Trying to play a dollar correction has been a dangerous and unprofitable game however.  We know that firsthand, as we have called about five of the last zero dollar corrections…that is a disclaimer. 

Stay tuned.