Monday, June 27, 2016

Near Term, The Dollar Is The New VIX

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The dollar may tell a better story than the VIX.
The US claims to be in selling dollars to the world.
If the dollar can't weaken, it's a sign of stock selling.

We're all trying to understand how much risk is in the world right now. We think watching the dollar is a powerful measure to understand risk. We typically love watching the VIX (NYSEARCA:VXX) as a risk indicator. That said, we are watching the dollar (NYSEARCA:UUP) to let us know how markets follow through.
Fed Selling Dollars
The Fed made a strong statement of support for foreign government currencies. They appear to offer a large supply of dollars in the market to support other currencies. If it doesn't work you have a signal how much concern is in the market. We expect that concern to translate into stock prices.
The Fed said this Friday, "The Federal Reserve is prepared to provide dollar liquidity through its existing swap lines with central banks, as necessary, to address pressures in global funding markets, which could have adverse implications for the U.S. economy."

Chaim Siegel has been working with hedge funds and mutual funds as an analyst and PM his entire career. Chaim specializes in earnings and predicts, analyzes and reacts to earnings and earnings events as well as developing current company stories with a hedge fund perspective. If you want his analysis real time sign up to the right for real time email alerts. #in, $spy, $qqq, $iwm, $vxx, $ycs, $fxe, $EUO, $YCS, ^GSPC, INDEXSP:.INX, #elazaradvisorsllc, CME Globex: ES Disclosure: These trades can lose you money and principle especially when using leverage BY USING THIS SITE YOU AGREE TO TAKE ALL RESPONSIBILITY FOR YOUR OUTCOMES AND LOSSES AND HOLD BESTIDEAS, ITS CONTRIBUTORS AND ELAZAR ADVISORS, LLC HARMLESS

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