Dollar

Nice inverted head and shoulders on the DX. Technically, the Dollar is ready for a big rally. The only thing it needs is a spark to set it off, and that spark is going to come from the EURO zone. Another Euro debt panic is brewing at the moment. S&P just downgraded Italy. I am watching the situation in Spain closely.

If the Dollar rallies, it will be bad news for all risk trades (ES/EUR/CL). We might see a massive unwind like we did in CL at beginning of the month. I am still not sure which instrument would be the best to play this off. I think CL has dropped too much in May to provide good shorting opportunity. I've been burned shorting ES too many times in the past. I think EUR/USD is probably the best shorting bet.