USD as a 'Buffer Strategy' Post Interest Rate Hikes

Tech Stocks Significant Correction Move & Yields on the Rise 
 
With the USD softness at this time. The way we approach its weakness for now is quite independent as it would likewise be used as a buffer strategy that once the FED raises rates the USD would be coming from its low pre-adjusted for inflation levels the 4th quarter 2018. 
 
Besides with the USD - DXY failure to break through its 3 month MA with barely a low touching at 93.85 have recovered rather quick enough post #ADP data that registered a high at 96.12 for the week from a corrective session low at 95.00 basis pt. Likewise triggered the abrupt rise of US yields well above 3.10 levels.
 
And this would be well in line with our projection for 10 year US yields to stay above 3% and relatively closer to 3.10/35 presumed point range heading into the end of 4th quarter 2018 & into the 1st quarter 2019. But it was actually surprising to see gains as early as the first week of October for yields to cover 10 basis breaking 3.10 levels then. Thus Equities tend to be on the defensive moving forward.
 
Even when the major indices like the DOW registered record levels, the accelerated US 10 year Treasury notes at 3.22% along side the 30 year bond yield at 3.33% have initially capped equities continued run. 
 
That's why our recent stance being on the defensive while prices are still in the higher band, have placed our strategies more to our advantage being  protective of the gains made on the USD Futures & ETFs over the course of the year. Especially with a cautious play with yields expected to increase, but not as fast as it did in a couple of days to move 10 basis points that resulted equities to correctively move after a record high. 
 
With the#DOW at 26447.05 #SP500 at 2885.57 and the #NASDAQ at 7788.45 decline came with a mix NFP-JOBs figure missing expectations have dampened market sentiments  contrary to unemployment figures marked at 3.7% at it lowest level, as investors worry about risng interest rates is another story.
 
Similar Price Action Triggers Defensive Stance
 
Nasdaq record level at 8133 dated Aug 30 and a retest run at 8107 on Oct 1, 2018 has now served as its initial price cap which we called on 'Comparative anlaysis: NASDAQ on Tech Stocks' last Sept 2, 2018. A Defensive Stance taken choosing between NASD-Short #PSQ and / or similar Hedge Put Options was well worth the risk maintaining above 3.05 & after a break-through, was a clear strategy that rates in place shall continue ahead of the curve. 
  
This came along side a high probability of profit taking activities for both tech stocks #AMZN and #AMD to retrieve from their respective highs before the real decline follows through. For AMZN coming from a 1st high at 2050 (9.4) and the same run towards a retest at 2033 (10.01) closed for the week ending Oct 5, 2018 at 1889.65 with a low at 1862.00. With AMD declining to 27.35 from the 1st high at 34.15 and 33.60 secondary high respectively. Although, our market call may have been a bit too forward looking, nevertheless it has delivered and currently validated.
 
Note: It now depends on how far Treasury yields can go further towards the coming weeks and end the year with a bang or bust for equities! Or other narrative plays can come up during the course of time that may equally affect price action is another story.