Dummies are lining up to buy AUDUSD an EURUSD – despite the fact that both have risen by over 200 pips in the last session and a half.

Given how close we are to a short-term top in stocks (i.e., VERY close – I shorted Dow futures at 10808, and DAX at 6315, five minutes ago), it is a slam-dunk that both EUR and AUD will retrace at least 2 full handles by the end of this week. Likewise, don't be shocked if the Dow drops 300 points between now and next Tuesday; it really is now being driven by the nuffnuffs and the algos (algos are nuffnuffs too – an electronic herd is just as stupid as a human herd).

 

For the record: shorting Dow 10808, DAX 6315, AUDUSD 0.9722 and EURUSD 1.3620 (yeppers, I'm doin' all of the above).

Considering that the last long call on AUD was at 0.6711, I reckon we've got some slack to play with, yeah?