Thursday, August 4, 2011

$DXY Update

All of the $DXY components are now cooperating (with exception of CHF today). The long dollar index trade I mentioned last week is in full mode. Possible roadkill could be a FED meeting next week. I bet many market participants are now thinking that Mr. Bernanke will announce QE3 at the meeting. I have been saying all along, no end to QE any time soon. He calls it something else and goes on with it, I say. So those who held on to the trade are smart to scale out and tighten up the stops. You never go broke taking profits. Should QE3 not be announced at the meeting, and Mr. Trichet finally comes to his senses and stops raising, we may have a pretty good continuation of this DXY long trade.
Good luck!

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