Last Friday’s spike down in the US dollar at 75.85 opens the door for a run down, eventually, to our November 2009 2 year low at 74.21. If that does not hold, the next target below is 71.55 and then 71.05. These markets turn and move like a Naval task force, with hundreds of ships in tow. The turn has begun, exactly how far the market moves, no one, and I mean no one knows. This movement, however, will give opportunities on both the short and long side.
Already, it has brought out the perma bulls in the grains. 7.00 corn? 14 dollar beans? Wheat? who knows. Already we are getting reports that hedgers (end users and producers) are abandoning wheat futures, moving instead, to using corn futures while adding +70Cents to corn.
The entire basis as well as general liquidity issues has begun to show its consequences.
The Dow Jones Cash has already posted a high this morning at 11,200. It broke off that first print. I think the play is to take a speculative short position, but manage it very closely. We are 8 days from the election. The market is telling us it likes the possibility of grid lock in Washington. Ideologues on both sides should learn from this. American politics is played in between the 40 yard lines. The extremes give the masses the hee bee gee bees.
Crude oil should take a run at its recent high at 84.50. mostly off of the the weaker dollar.
As always use your stops to limit your losses.
Good Trading
