Wednesday, June 03, 2009

$USD Bounces - Commodities Get Crushed

We've been monitoring the $USD's slide and said that it was coming into support. Today the USD gapped up on the open and rallied all day. So, the obvious play is to short commodities. I prefer the Canadian names because the $CAD is going to take a hit on a stronger USD as well, and that sounds like a double play. Not sure if that's real or bogus, but in my mind, it all makes sense.

The first chart is CNQ 15 min. the blue lines represent S/R. CNQ was basing along the middle trend channel line yesterday and gapped lower on the open. Ideally, you want to get in as close as possible to a blue line, and above the lower trend channel line.

The best way to get in is to move it to the lower timeframe. Using the 1 minute chart below, we see a tiny h pattern form at the base of the second blue line.

POT paused at support to consolidate the first leg down. It couldn't close above the downsloping 5 period EMA, so short as price crosses below the blue support line.

AGU formed a bear flag with lots of room to move to the next support level.

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