FOR WEDNESDAY: (5/3) Trade awaiting FOMC announcement on Wednesday. With the Fed unlikely to hike again this time, if we get a somewhat hawkish tone today, or even praises on the labor condition, rest assure market will blow it out of proportion and push USD higher. Given the recent GDP print for 1st quarter, it seems hard to expect a hawkish tone or rate hike this meeting. Cycles are volatile for Wednesday and something unexpected seems likely based on cycles but exactly how to trade that isn’t clear. Our cycles into the end of the week focus on weaker dollars and stronger gold and higher stocks and higher bonds and higher crude and that is what we will focus on.
JUNE DOLLAR INDEX (electronic)
SWING TRADING RECOMMENDATION: Sell June dollar at 9930 with a 9975 stop.
TODAY’S COMMENTS: (5/3) Weak close has us wondering if we will ever get close enough to sell this market near 9930. If the statement is dovish, the market will thank and we will never get in. Cycle lows point into May 5 or 7 for 9833 or 9770. Will have to wait for the better set-up if it comes in. Not sure at what point we will chase. We still favor lower prices the next few days to 9800.
CYCLES OVERVIEW: Lower into Wednesday and Friday, May 5; higher into May 10-11.
