Exposing Ideas to the Envelope of Serendipity

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Tuesday, August 4, 2009

The Diving Dollar

The stock market has been directly influenced by the rise and fall of the U.S. Dollar for some time now; and in fact, if you haven't already added a live chart of the $USD to your trading screens, you may want to do so. I watch the $EUR/USD right alongside my futures charts whenever I'm in the market, and personally can't imagine trading without being able to keep an eye on them. Watching the UUP (the Dollar ETF shown below) intraday works just fine, and can add a valuable dimension to your trading landscape. The chart shown below is a notably bearish chart that suggests further weakness in store for the U.S. currency. While bounces can be fast and furious (and one may be imminent), the prevailing downtrend is well-entrenched, the pattern bearish, and at this time it would appear that any near-term rallies are destined to be short-lived.

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