After a strong rally such as yesterday you would have expected some strong follow through today to validate the new leg up, this has not happened with the ALSH ending the day virtually unchanged. WHAT ! indecision after such a strong up day?? Surely that cannot be.......
Doji's are a sign of indecision and after a strong up day, indecision should not be present. Yesterdays strong up day probably was a short squeeze and is Mr Markets way of getting Bears out before staging another drop.
USDZAR seems to be building a nice from which to launch, patience is all that is required. The USD rally could be a fast and furious affair with every man and his dog selling the dollar. As Buffet says "Buy when others are fearful".
Remember USD up equals Stocks down and this includes "risky" emerging markets. The USD seems to have taken over as the currency of choice for the "carry trade" - i.e. borrow in USD and invest in risky assets.
Sentiment wise the Bears are scared currently to pronounce their Bearishness - this is precisely the right time to SELL. Remember with the crash of 2008 and you heard the lone voice saying BUY.... and you thought to yourself - "what a nut case, you want to buy NOW, of all times........!" Well I feel we are approaching the exact 180 deg of that scenario.
Good Trading
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