Traders must also be wary of a brief counter-move right at the point of trend reversal. There is often what I call the same "dieing gasp" move in markets as there is in life. Markets imitate life because we are the market, the market is us.

Think about a person's last inhalation, or a bankrupt company trying to put on its best face right before closing the doors, or a disgraced politician putting on a big show just before resigning. The same thing happens in the market; so do not be fooled.

What I am saying is that the Fed will try hard to stop the collapse of the $USD. All the markers will be called. Remember the morning of the China President's visit a week ago, and the raising of margin rates in metals trading at NYMEX.

Yesterday it was the Congressional Committee hearing the nonsense from the Fed chairman that he may not increase rates no matter how bad the data points may indicate a raising is required.

This week there is a new ‘Snow'man as spokesman of the White House.

Today there is word that America's friend in the Bank of England may actually drop their bank rate soon.

These are all steps one takes as a last stand. The results, I think, will be similar to those following General Custer's final engagement.

In the case of $USD, here's how I think it will play out.

I think there is going to be a severe fall-out in global equity prices as commodity prices lift off, including $800 to $900 gold and $80 to $90 crude oil. Then there will be a rebalancing of world currencies after an emergency G-20 session, and, following that, a new Bull Market for both stocks and bonds.

An extreme move in capital markets such as what I envision happens once every 20 to 30 years. The point is that you can protect yourself.