"If The Dollar Rallies Hard, Look Out Below." (UUP)

Wrapping up our Dow Jones blog empire macro walkabout. Matt Phillips warns of one potential trap for the unwary. Remember this chart from "Death Penalty: "Goldman: The Fed Needs To Print $4 Trillion In New Money" (UUP; SPY)"?:

From MarketBeat:

As we’ve told you before, everybody’s been hating on the U.S. dollar ever since expectations started to grow that the Fed was going to restart the printing presses. But it seems that some of those dollar shorts might have to scurry for cover, if the dollar’s downward push is about exhausted.

Today’s front-page Journal story saying that the Fed will take a “slow and steady” approach to QE2, rather than a “shock and awe” posture the markets might prefer seems to be giving the greenback a bit of a lift and weighing on bonds a bit....MORE, including the overlay chart of the S$P 500 and the buck for Wednesday.

Previously:
"Say Goodbye to Euro Rally" (EUR/USD)

"Bernanke on Gradualism (And Miniature Golf)"