UUP trade ideas
UUP - over bought and running into resistenceFor the last month stocks connected to commodities have been getting hit hard. One reason has to do with the US Dollar strength. I don't trade currency, but looking at the monthly and weekly charts it seems the Dollar is at a good level at least start pulling back and perhaps giving us some good long opportunities in oil, copper, and gold stocks.
UUP update - 09/18/2014Dollar faces major resistance established since 2008. It is also in an overbought situation not seen since 2010. Meanwhile, gold appears to be sitting a major support established since 2010. Next couple of weeks should be interesting.
Market Themes: NO chance of rate hike, NO Deflation - USD This is a year-to-date chart scaled on a percentage basis that outlines the relationship between the US Dollar, 20 yr+ Treasuries, Gold, Energy (think oil, gas etc), the Euro, and the US Real Esate Index. These represent the different investment classes in the market (rate-sensitive instruments, earnings sensitive instruments, and hard assets).
As you can see there is a huge disparity with US Dollar, Treasuries, and Real Estate at highs while Gold, Energy, and the Euro is quite low.
What this implies thematically is clear: The market currently believes there is NO chance of a rate hike (see treasuries, real estate), that there is NO chance of deflation (see EURO and Dollar relationship, and Gold / Energy underperformance) and, although it is not shown since the chart was getting cluttered, there is no indication that corporate earnings are at risk.
Follow this chart because these themes are where you should be focusing your asset allocation.
Going Long the Greenback through ETFThis idea is driven by my earlier bullish idea on the U.S. dollar, check the related link for the original idea.
If you have been following my ideas, i have been bullish the U.S. dollar for a while, and here is another way for who dont have access to the currency market to go long the U.S. dollar through the UUP - PowerShares DB US Dollar Index Bullish Fund.
Good luck, join me at twitter.com
UUP Dollar Bullish Fund Carving Out Inverse Head & Shoulders Based on this pattern triggering on a move over ~21.60 you could expect a measured move to ~22 before hitting resistance. The timing of this breakout seems to be coinciding with market topping action which further strengthens the likelihood of this chart having predictive utility.
This chart taken together with today's breakout in Treasuries (TLT) and over 30% spike in the VIX this tells a tale of risk aversion and flight to safety into bonds, US Dollar and possibly gold.
Potential Reversal at 21.20 | $EURUSD $EUR $USD $UUP $UDXFriends,
On January 10th, we offered a bearish target in the USDollar Index using an advanced pattern called "Wolve Waves Pattern", named after its discovered, Bill Wolfe - See the bearish target being hit quite precisely, and the rallying that ensued here:
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Now, we continue our study of the USD, we are turning to a 3x bullish PowerShares ETF, namely: UUP. In this chart, price continues to fall to a level that is nearing a target we had defined back in early February, but decided to reconfirm once more.
In essence, to the advanced pattern trader, the geometric pattern that may come out of the chart is a Bullish Shark, followed by a 5-0 pattern. We mention this because in the predictive analysis and forecasting strategy we use, the targets that were generated and posted in the chart came out just as close, give or take a few decimal pip values.
Hence, combined with our proprietary strategy, we believe that UUP is coming to a potential reversal point. In fact, we continue to code the probability level of the forecasts using green for "High Probability", yellow for "Intermediate Probability", and red for "Low Probability".
In this particular case, the targets are:
1 - TG-1 = 21.20 - 01 MAR 2014, yellow
2 - TG-Low = 20.95 - 01 MAR 2014, red
3 - TG-High = 22.04 - 01 MAR 2014, red
In sum, our prop strat has produce one intermediate/moderate probability target in the most immediate level, and two low-probability targets, one in the low side with a "Low" qualifier based on our analysis outcome and lack of corroborating data with a background geometric pattern, as compared to TG-1. In the case of the TG-High, the probability is rated as low based on the variation between TG-1 and TG-Low.
OVERALL:
our system calls for a potential reversal at the levels and for reasons defined above. The overall directional bias remains bearish until we receive an early bullish market reversal signal, in which case, we would turn the "sign" over to "Neutral". Not until we receive a bullish market reversal confirmation, do we plan of posting a "Long" sign.
Hey, want to see another potential Wolfe pattern development? Check out our recent take on MSFT:
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Also, see our recent comment on Bitcoin's BTCUSD (Bitstamp and MtGox exchanges) here:
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Cheers,
David Alcindor
TradingView.com Moderator, Alias: 4xForecaster
Predictive Analysis & forecasting
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Follow our forecasts, signals and analyses on Twitter
Alias: @4xForecaster
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Disclaimer: Forecasts, analyses and directional opinions generated herein are for educational purposes only and are not trading recommendations. We trust that you will do your own due diligence first, then seek professional advice from a licensed professional, then enter the market at your own perils - David Alcindor - TradingView.com Alias: 4xForecaster
Is the $DX_F $UUP carving out an IH/S?If this turns out to be a bottoming formation - some likely near-term targets for dollar index ETF
Dollar Strength a Sign for a Correction?Not sure what to make of the dollar strength. The market is at an all time high. This is usually negative for commodities. Could this be an early warning sign for equities or just a strong US economy. Upside target at $22.94 for now.
UUP50% Retrace & bounce. Long Friday wick a concern(Gap Filled). But, if price holds above 22.53, price will work on new High.
