Greetings,
These days everybody and their brother is an avowed $USDollar Bear. It's quite a lopsided opinion. Less than 3% of all analysts surveyed are bullish on the $USDollar over the next 90 days. That means that over 97% of the players are short. In fact, now that the local papers have finally started talking about the weak $US Dollar every small retail trader on the planet is scrambling in to get short. That is a danger sign for those that are already short as the little guys tend to get in near the end of the move.

If you study the weekly chart of the Dollar Index below, you quickly see that the time to get short was way back in March on the perfect M-TOP pattern during the end of March. It's a little late to be getting short now after such a significant move down. I wasn't paying attention back in March because I was buying stocks that had collapsed. Rather than screwing around with 50 different stocks I could have made a lot more, with less aggravation by simply shorting the $US Dollar on a text book M-Top failure swing.
(Weekly DX Chart using Kwik*POP Indicators)

I think it is important that we point out some obvious patterns tied to the price direction of the $US Dollar. The stock market crash ended (or at least bottomed out) in late March as the $US Dollar turned down with a vengeance. Interesting .. eh? In fact, if you've tracked things, the stock market tends to go up when the $US Dollar goes down, and that's been the pattern for some time now. Naturally, gold goes up as the $US Dollar weakens, but so does the stock market.

It's difficult to come up with a positive fundamental reason to buy the $US Dollar as our debt keeps mushrooming every hour of every day and our Government appears content letting the $US Dollar continue it's long, slow slide to bolster the balance of trade. So what happens if the $US Dollar bounces back up again? Could not we expect the stock market and gold market to sell off?
 YES!!
Let's consider the technical reality of these markets. The $US Dollar is now sharply oversold and the stock market and gold market are sharply overbought. As you know, Mr. Market likes to do the most damage to the largest number of players possible. Mr. Market has one of his favorite set ups unfolding right now. Everybody is BEARISH the $US Dollar and BULLISH on stocks and gold. With a little effort here, Mr. Market could crush a lot of folks by giving us a bounce in the $US Dollar that will trigger a decline in stocks and gold. Is that bounce possible?
 YES!!
Mr. Market just loves nailing the majority of traders when greed and arrogance overrides logic.

The $US Dollar is now approaching a key technical threshold, an area where the counter rally started way back in 08/08. On the weekly chart above, notice that first blue candlestick that appeared back in 08/08 on the left side of the chart. The US Dollar Index moved up from a low of about 74 and that first blue bar closed at 75.83. That 74-75 area is also an interesting Fibonacci level, a level that many times can trigger a reversal in an oversold market.

I'm just sharing my thoughts with you, but I am now looking for an entry pattern to get short the EURO/USD which will make me long the $US Dollar. Yes, I realize that sounds crazy. Yes, it's a risky play, but over the next 10 - 12 days I will initiate a long $US Dollar position either through Forex contracts, ETF's or futures or possibly options as soon as I see a reliable pattern. I'll post you in a newsletter once I've initiated a long $US Dollar position. We don't have a BUY pattern yet, but we're getting very close.
(Weekly EUR/USD Chart using Kwik*POP Indicators)


As you know from previous newsletters, I've already started to scale in lightly on a short position on the stock market.
 I may be early on that, but I'll add more on any further rallies on the S+P 500.

Between now and October 20th I'm expecting a SHORT TERM sell off in stocks, a SHORT TERM rally in the $US Dollar and a modest decline in gold.

I still believe that we have not finished with the credit collapse and therefore, we are still in a deflationary environment.

BUT,by the late summer of 2010 the pedulum will start to swing the other way. Inflation will heat up and the $US Dollar will start to head back down to new all time lows as the bond market sells off and interest rates start to spike higher.

My strategy is 100% opposite of what your broker or guru is telling you today and I could be totally wrong on this. Based upon what I'm reading and the chart profiles of various markets and the bullish sentiment from Wall Street it just has that 'Deja Vu' feeling right now. Earnings numbers are rigged again and all expectations are for a revival in consumer spending. Consumers don't spend when they don't have a job, or are worried about losing their job. Timing is the tricky thing as markets can stay over-extended much longer than your cash and margin will accommodate.

I'm laying my personal strategy out for you because that's what we do at Kwik*POP. It's how we offer our software.

We don't sell our software. We let you 'try it out' first. By doing that we put it on the line everyday. Once you see how our software works and get a sense of how to target trades from our training sessions in our chat room and the video's and PDF's on our web site we let you decide.

 You don't get a sales person phone call with a high pressured sales pitch. You don't get 20 e-mails urging you to buy Kwik*POP.
YOU GET NOTHING FROM US UNTIL YOU SIGN UP. Once you sign up we give you 100%.

Like I said, we don't sell Kwik*POP. We believe in a simple motto; seeing is believing. If, after trying our product out, attending our chat room training sessions and reviewing our on-line training materials you decide that it's not helping you ... that's fine ... don't sign on. If you like Kwik*POP trading software then sign up and join our club.

There is always one thing you can count on when dealing with us. INTEGRITY. We've been licensing Kwik*POP since 1999 and we've always given our customers the best that we have and we always commit 100% of our efforts to continually improve our product and training. We're not fly by night internet hustlers. We're in this for the long haul and totally committed to our customers. Like I said ...'Seeing is Believing'. Take a free trail and join us in our chat room.

Regards,
WDH