Wednesday, August 26, 2009

Long USD Short GBP, EUR, flat on equities

Closed out most of my longs today and went long the USD on expectations of renewed risk aversion.

The equity market is within a rising wedge formation and momentum is quickly dissipating. Rising wedges tend to break violently and the breaking bias looks to be towards the downside in the short term.

I expect crude to weaken on the short term equity market drop and dollar strength as well as a small VIX bounce.

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