Intraday Charting

Pretty simple intraday action: crank the dollar, spook everything else. The key correlation charts have been linked at the hip, with the only notable recent outlier being the 10 Year which has been drifting slowly lower, presumably ahead of the $100 billion+ in upcoming coupon issuance.

On the commodity side, same story: dollar leading every asset class. It is time Econ 101 textbooks forget all about that whole supply/demand drivel and just have lesson one (and only) teach all about dollar printing and its consequence on all dollar denominated assets.

Comments

[chet]

Keep it floating between $75 and $76 for awhile before it drops again.  Remember how it floated between $76 and $77 for a month.  Slow and steady.

[Anonymous]

I dunno man there has been substantial volume in DXY over the last week or so. I think the uncertainty surrounding the dollar is to the upside since the POMO's stop by weeks end.

[I am the mole]

+1

[Anonymous]

Slow and steady... until it isn't.

[Anonymous]

Yields are higher across the whole curve today this is an interesting decoupling as the pattern over the last 6 months or so has been yields go down when the dollar rallies / equities fall and vice versa.

What is everyone's take on this?

[TraderMark]

Teun Draaisma of Morgan Stanley Europe (who advised to get the hell out of dodge in summer 2007) says we're in late stages of the rebound rally

http://www.fundmymutualfund.com/2009/10/teun-draaisma-of-morgan-stanley-...

Offers historical timelines in terms of duration of falls, then bounces, and what happens once the tightening cycle begins.

Is it worth trying to capture the upcoming last ~10% of a ~70% rally? We feel we are in the latter stages of this cyclical bull market, before the period of indigestion that typically occurs when the tightening phase starts. We recommend investors use significant further market strength to position for the next phase. In the aftermath of secular bear markets these tightening phases could last for four quarters, while markets fall by 25%

[TraderMark]

Teun Draaisma of Morgan Stanley Europe (who advised to get the hell out of dodge in summer 2007) says we're in late stages of the rebound rally

http://www.fundmymutualfund.com/2009/10/teun-draaisma-of-morgan-stanley-...

Offers historical timelines in terms of duration of falls, then bounces, and what happens once the tightening cycle begins.

Is it worth trying to capture the upcoming last ~10% of a ~70% rally? We feel we are in the latter stages of this cyclical bull market, before the period of indigestion that typically occurs when the tightening phase starts. We recommend investors use significant further market strength to position for the next phase. In the aftermath of secular bear markets these tightening phases could last for four quarters, while markets fall by 25%

[TraderMark]

sorry for double post, ZH running slow today.

[Anonymous]

In spite of all this, some computers are still playing ping-pong with AMZN with valuations in deep space. Not everything is USD related :-)

[jm]

Market meta-structure looks stoned out of its goard right now.

The implied correlation train is leaving the station...  VIX too.

This Treasury auction may just screw up all hope and dreams.

[ghostfaceinvestah]

"only notable recent outlier being the 10 Year which has been drifting slowly lower, presumably ahead of the $100 billion+ in upcoming coupon issuance."

And no QE daddy to come in and mop up supply a week later.

[Gordon_Gekko]

Except perhaps (wink, wink) "indirect" bidders.

[Dixie Normous]

Once again a handful of stocks preventing a full on toilet flushing.

[Edna R. Rider]

Some very hard working machines supporting SPY at the 10-day low of 106.84.  Manic buying, because, you know, stocks are such an awesome deal right now.  Prepare for the push up.

[Gilgamesh]

XLF providing the bottoms so far (twice) @ its 50DMA.

Edit:  And it fails.  Likely next bounce is SPY 50DMA - barring a 3:30 ramp.

[Anonymous]

Could someone explain why the dollar nosedives and gold follows? As a dollar-denominated asset shouldn't it climb? Or is that your point and I'm just being dense at the end of a frenetic Monday?

[time123]

The dollar moved up and that is part of the reason gold moved down. I have been expecting a strong dollar this week due to the GDP numbers coming out on Thursday. It should get stronger against the Euro over the next months, but likely weaker against BRIC currencies.

It all has to do with interes rate differentials and relative economic growth numbers.

time123

P.S. I get my timing signals at http://invetrics.com

[Gilgamesh]

SPY daily volume since Sept 1 shows the key regarding up/down days.

[Anonymous]

Agree that this rally is stretched -but the dollar can still fall as markets and most commodities fall. Another bout of weak economic data can make that happen easily. Personally I think we'll be below 70 on the DXY come summer. Only thing I want to be long is gold, gold stocks and maybe agriculture...gold miners and fertilizers still look good longer term to me.

[Gilgamesh]

Hello brother from another mother.  But still need a lot of selectivity in those.