Why Are They Lying About the Dollar?

Buy the dips, and sell the rips.  When this, the most hated equity rally in history is over we will look back, sigh, and just repeat, buy the dips and sell the rips.  I commented in an interview during the last dip that you had to continue putting your balls on the line during sell offs to make money in this rally.  The next day the market rolled over, breaking the channel, stopping me out of many long positions, and trapping a ton of short sellers.  The general principal though was correct.  We are now in sell the rip territory, if you have full long equity exposure I would be paring it back the next day or two.  If we break through the upper bounds of the channel, I wouldn’t hesitate to say 1200 by year end, easily.

Bernanke gave an Econ 101 lecture this afternoon.  Now, I know we all hate the fact that the fed, treasury, white house, along with any and all arms of government continue to lie about wanting a strong dollar.  Frankly, I don’t really care that Bernanke decided to save us all by giving massive amounts of free money to the banks so that they could buy up assets and attempt to repair their balance sheets after he all but told them to just buy shit because he was going to crush the dollar.  What other option did they have, none.  My two questions are, why must they lie about defacing the dollar to save this country, and how the hell are they going to stop its slide without completely crushing the carry trade?  Believe me, I understand the negative aspects to a weakened US Dollar, I just don’t understand why they can’t come out and say, hey guys it was our only option, and for now it’s working.  The markets no longer give a crap what Bernanke or any of his minions say, which is a terrible thing.  If we can’t trust our leaders, political, economic, military, or otherwise to give us straight talk, what do we have?  Here’s my guess, if they came out today and admitted to sinking the dollar intentionally, I think it would actually rally.  My bet is they are scared of a complete collapse.  As for the $USDX chart you see below, trade the channel, we are towards the bottom end.

It’s time to be very cautions of being long gold on a short term time frame.  We are very extended from the major moving averages and moving parabolic.  I’m still long, and won’t exit until a new 20 day low is made, which means I could still yet give back a good portion of gains, but I’m in this trade for the long haul, and I still expect to see 1300 within the next 6 months.  Don’t even think of shorting gold here, just don’t.

Crude is setting up very bullish as the bull flag shown here is almost complete.  A break through the upper trend line should get you long.  We’ve seen overbought readings correct over time as opposed to price, very bullish action.

The contango is out of natural gas which once again makes $UNG a viable vehicle to play from the long side.  The momentum on this, the second test of 9$ has been far weaker than the first.  Are we staring at a double bottom?  I don’t hear the same crap coming from the natural gas perma bulls that they were shouting the last time around, which makes me bullish.  Traders have given up on this thing and the stochastics have been oversold now for a few weeks.  I think we get a nice bounce, and we may even be seeing the bottom.

Performance of the Surfview Capital Momentum strategy has been solid during its first week.  I will be looking to increase the 7% cash position over the next two days if we start to see the market roll back over.  I’m stalking names in the energy sector as massive outperformance will be found there if crude breaks the bull flag.  I’ll look to pare back my tech exposure in that case.

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