We put out a strong suggestion on April 25th that 2.1620, within our 2.1104 to 2.1811 target range for USD/DEM, would be a logical place to take a stab at the short side of the dollar. It's pretty violent out there, but we still feel very strongly that a sudden reversal in DM (euro) weakness will occur shortly from around these levels. This is confirmed by the picture in EURO-JPY below that looks like an almost-complete 5-wave decline. Get ready to buy this one too!

Chart produced using Advanced GET End-of-Day

Meanwhile mortgage-backed futures look like a classic 4th. wave rally is about done, and this market should shortly make a 5th. wave decline. Since the January lows, this market has made up very little ground while at times U.S. Treasury bonds were partying. Regardless of the excuses people may make for this type behavior, this is a classic negative sign for the fixed income markets in general. Look for a 5th wave decline to at least 86.05.

Chart produced using Advanced GET End-of-Day

And if the euro is soon to bottom, and mortgage-backed bond futures fall, what should one think for stocks? Well, there's a tremendous amount of noise out there at present, but in normal circumstances it would certainly not be bullish. Amazon remains the most clear chart pattern...a rally back to the neckline should soon be replaced with renewed weakness. Sell. The jig is up -- it's just that the average guy out there doen't know it yet.

Chart produced using Advanced GET End-of-Day

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Sand Spring Advisors provides information and analysis from sources and using methods it believes reliable, but cannot accept responsibility for any trading losses that may be incurred as a result of our analysis. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, and should always trade at a position size level well within their financial condition. Principals of Sand Spring Advisors may carry positions in securities or futures discussed, but as a matter of policy will always so disclose this if it is the case, and will specifically not trade in any described security or futures for a period 5 business days prior to or subsequent to a commentary being released on a given security or futures.