I am currently building positions based on the fact I am expecting USD to strengthen at the equity markets fall.

I have received one or two emails  asking for my opinion on why the USD has not strengthened  yet equities are trading heavy. In fact overnight the commodity currencies broke higher in style. I was stopped out of both AUD/USD and NZD/USD shorts. In normal trading conditions my stops would have been wider, but as you know I am trading smaller position sizes and narrower stops due to the twitchiness in the market. That does NOT mean that I will not re-enter short again later today.

Basically, when it is RISK OFF or RISK AVERSION one would normally see the USD strengthen. Or the other way to look at things... when there is FEAR the USD strengthens. We are not seeing USD strength yet equities are falling. I think we are victims of the markets not believing that this anything else other than a 5-10% mini correction.

Remember, we are in an uptrend in the S&amp;P. If you look at the Daily chart there is no denying that fact. We have seen repeated higher highs and higher lows in the grand. We need to see a lower low to get things moving. A lower low stops the repeating trend and should make matters a little more interesting. The S&amp;P below 1830, maybe a little less will open up the eyes to see that the fall in the markets could be something more than twitchiness in an up trend. Watch the S&amp;P 1830 today.

If we bounce off 1830 higher the chop fest will continue.

I am looking to add to existing positions to change / improve my cost averages and I will re-enter more trades today if we see a confirmed break lower through S&amp;P 1830 support.

I will tweet any trades that I am looking at. It may be an interesting day...but do not hold your breath.

Scott