UUP Charts (unleveraged version of EUO)

Click on Chart to Enlarge

This chart is a UUP daily chart which is a bullish US dollar ETF, and is the one I reference most often on the blog. I have put some notes on the chart showing some a potential breakout of a falling wedge. This particular pattern is typically a very explosive chart pattern. It often ends a larger down trend and can signal major trend change. Also it is ideal for call options, because the rate of advance after a breakout is usually about 3 times as fast as the prior decline.

So, for trading purposes I am once again hoping to catch a major reversal on the dollar. There have been a few similar trades that have been stopped out over the last few months, and it is a similar situation here where I am hoping for a quick advance to get the stop up to breakeven and then let it run.

Click on Chart to Enlarge

This is just an hourly chart of UUP showing the breakout in closer detail. Usually a real breakout from this type of wedge will not have price fall back into the wedge, though it may consolidate above the trendline (in the yellow area).

Also I wanted to post a couple links to recent things I've read regarding the dollar to show two sides of the sentiment and realization of what is/may be occurring.

This first link is from Karl Denninger showing what I would presume to be the smart money acting on the reality of the credit situation in our monetary sytem.

http://market-ticker.denninger.net/archives/1539-Possible-Credit-Dislocation-Be-Warned.html

The following are links to the Web Bot Project, which I do think is a very interesting project, but really can't agree that the collective conscious should be expected to get major financial turns right. My inclination is that this is a good contrarian signal that the dollar may be bottoming, but we'll see.

Web Bot Project, Further Comments