US Dollar Index trading plan

The US Dollar index has a Death Cross (see previous article), this could be a turning point for the dollar or it could be a brief period of consolidation then a continuation to new highs.  Presently, price is at 94.90 area and has been moving down breaking a supporting trend line.   If the dollar index price closes below this area then we can look for a continuation to the next support at 94.255, the previous swing low, which could be support.  If sellers pick up volume we could see price test to 92.60.

The volume on the Dollar Index DX 12-15 is decreasing with a slight bump up on the daily as sellers moved in breaking the supporting trend line.  Take note that from the move down on August 21 we have  large capitulation volume sell off.  this topped 140,000 contracts.  average volume this past week has been 26,704 contracts and has been under the weekly average drawing it down.

Dollar index Trading Plan for late October through November 2015

Sell side to support through October, will be selling the rallies and shorting in to any continuations if meets risk criteria.  November, watching for a buy side opportunity after some sort of downside support or capitulation revealing the Market Makers levels.  November is typically a strong month for the dollar index, although last year we saw mostly consolidation.

China is also back from vacation and it looks like they will continue their own Quantitative easing program.  Their best interest seems to devalue the Yuan.  More on this later.

Outliers to watch for:  Ukraine has been quiet as the US has been played out of our unseating of Syrian Assad.  This could be a hot point as many international player have brought planes, boats and missiles to the game.  Europe, could see more unrest as immigrants fleeing the previously mentioned situation are thrown into the winter months and no place to live.  Demonstrations could be on the social menu both for better living situations, and those opposed to the refugee numbers moving in.  There are to many financial outliers to list as derivatives, ETF’s, credit swaps, and other financial products are soaring.

Next week, more on the catastrophe hedge, Gold.