ADP Employment Report out today with a very ugly number. This report is a harbinger to Fridays big numbers. So far the reaction in the currency markets is USD strengthening. Which again makes no sense. Why would a weaker US consumer and job market strengthen a countries dollar? I ask these questions not to argue with what's happening but rather to figure out what's happening, so I can exploit the condition. This goes back to the same Logic I mentioned yesterday. The stock markets have been in a short term rally mode as the USD slide down. My reasoning is that with a cheap USD, US stocks are a bargain, hence the rally. If the economy where truly improving the USD would improve with it and why is Gold (a hedge against inflation and bad equities markets) rocketing up? Markets are far from rational and logical but if there is a fox in the hen house then a smart trader has to be wise to it. Simple logic and common sense can help you see when the chickens are restless, even if you don't see the fox yet.
Yes within 30 mins of writing the post the markets corrected and the fox was caught. I was not able to find a trade on it though