Tuesday, 9 June 2015

USD resumes cooling

Whilst equities saw another day of declines (if broadly moderate), there was significant weakness in the USD, which settled -1.2% @ DXY 95.21. Further downside to the 92/90 zone looks highly probable by late June/early July. From there... the 120s are due on a hyper-ramp into 2016.

USD, daily2

USD, monthly3


The Friday black-fail candle was certainly a warning of Monday dollar weakness.

The May low of DXY 93.16 looks set to be at least marginally taken out within the next 2-3 weeks. The issue is where will the USD floor.. before the hyper-ramp begins?

Best guess... 92/90 zone... by early July.. and then UP UP UP.

If correct, that will have bearish implications for most US $ asset classes, but especially for the precious metals and Oil.

Looking ahead

Tuesday will see wholesale trade data (10am).

Intel showing the way?

Today was clearly a bit of a mess. Opening minor weakness... a fair bit of chop, but then increasing sell side in the closing hour... not least in the Transports.

For me, Intel (INTC) is perhaps one of the more important individual stocks warning of trouble in the broader market. I sure like the company across the long term, but price structure is an extremely clear H/S formation. A loss of the $29 threshold will open up a move down to the summer 2014 breakout level of $25.

Best guess: further weakness for INTC (and the broader market) for much of this week. I will be watching INTC closely for a bounce from around $29. A few weeks upside... (maybe into early July), but certainly no higher than the $33s. I will consider an INTC short in 3-5 weeks, not least if the broader market is (for whatever reason) in the sp'2140s or higher.

*for some charts on INTC... see my 'fair value' page.

Goodnight from London