This is why I like to scale in and out of positions, (covered 1/2 of the shorts yesterday near the lows) especially when we are in a battle zone. We have a lot of traders looking up here and I am starting to see warning signs..AGAIN!!

The dollar has been the reason for the recent strength-well in just about everything. How Ben and gang are managing to push it lower in the midst of everything going on in the Euro is simply fascinating. I suppose we have the newer printing press than the Europeans..lol

In any case, as weak as the greenback may appear to be, it is trading within 2 separate bullish walfewaves, both pointing to much higher levels. Remember that chart I continue to show you each night, comparing the dollar now to the dollar in 2008 before it just bottle rocketed higher.

The pattern is still in play and the bullish walfewaves on the greenback combined with the bearish wolfewaves on the Euro, has me really thinking something is going on behind the scenes here. Are they trying to front run the Jackson Hole meeting nest week, assuming Ben is going to launch another failed round of QE3 and that is why the dollar has been under pressure?

I am trying to piece together another reason on why the dollar would be so weak against the euro. I can't come up with anything and any fx traders out there, please send me an e-mail for the reason. That market is not my specialty and if I am missing something, I would love to know.

As far as QE3 and Jackson Hole? I will steer you back to the "you can't read my-you can't read my-no you can't read my poker face" article I wrote when Ben was flashing is pretend QE3 bazooka in July, that ended up being nothing more than a water pistil.   With Oil ticking just shy of 90 today, the Jackson Hole pumpers must understand-BEN HANDS ARE TIED. If they are expecting QE3 to be announced, they will be greatly disappointed and it will set up the next great short of the last 30 days..especially if they dare to try and run the spx to the 1260ish area (not off the page).

http://marketspath.blogspot.com/2011/07/cant-see-mycant-see-myno-you-cant-see.html

 I like the short side for a 1/4 position IWM puts and/or TZA if we see IWM trading near the 71.65 level. Yes, that would be a double top-fill the gap and a bearish wolfewave pointing all the way down below yesterday's lows. If you are aggressive, you can try and short the next bounce at 71.25. I am just holding the 1/2 position now and if we see a breakdown taking place, I will add to the position then. G-