UUP/$USD Follow Up

How many posts have I put out recently on the divergence between price and the underlying action in UUP just this week alone? Here's yesterday's "Still Something Fishy With the $USD"

And today, we have what the underlying indications have been suggesting, a move up.

 First we had a break below a triangle type pattern, then yesterday a break below June Support. For new members, we almost always see a false break such as this one yesterday below June support, the day before an reversal occurs. The downside break does 2 things, it causes longs to sell and shorts to jump in, both are considered selling, which allows Wall Street to accumulate in the open as they are simply taking the other side of the trade. The second thing t does is perpetuate the snowball effect as prices move back above former resistance, all of those shorts that jumped in yesterday are now at a loss and many (especially in the heavily leveraged FX market-a little less since Dodd/Frank) are covering adding more demand which causes prices to rise faster-the snowball effect.

 Here's an intraday chart of yesterday's break of June support and today's move back above it.

 This hourly chart shows 2 accumulation zones, one back in late June that led to a move up and the more recent one the last week or so. When price moves down and 3C moves up, that's a positive divergence and almost always accumulation. When it occurs on 10, 15, 30 and 60 min charts, it's almost always institutional money. On 1 and 5 min charts t can be the start of institutional accumulation or it can be market makers and specialists moving the market which is often front running large orders they are filling for institutional clients. That's a very simplistic view and it's not quite that easy.

 The 30 min chart also confirms accumulation in UUP-a proxy for the Dollar Index. Note the divergence gets stronger on yesterday's break of support.

 Here's the 15 min chart confirming the same with a powerful leading positive divergence (vs the relative divergence).

 The 10 min chart also is leading and showed strong accumulation toward the end of the day yesterday.

 The 5 min chart is in leading position as well.

And the more recently detailed 1 min chart shows the added accumulation in the late afternoon yesterday.

We've been watching this underlying acton as the dollar fell, and found it strange, but we are watching institutional money, we don't know why they are doing what they are doing, we just know they are ahead of the information curve.

So, we may be finally looking at a resolution of a well confirmed positive divergence in the $USD.