Dollar Direction ^ V or >

[FundSurfer]

I've been preaching bounce for awhile now. The I-fund keeps proving me wrong. How low can it go? I still think bounce.

Big picture, I wouldn't buy dollars.

 

[fabijo]

I've been looking at that positive divergence for a while now, but it can sometimes take quite a while before that divergence kicks in.

 

[mayday]

Try this chart. Good stuff.

http://investmenttools.com/futures/...lar_point___figure_chart__dollar_futures_.htm

Thanks for sharing the charts Bullitt very helpful. The big reason I've been shying away from the I fund is this very weak dollar. I can't put my finger on why the dollar is so weak.

 

[mayday]

My 2 cents Big market movers 1 Wars, 2 Interest Rates, 3 Oil Prices, 4 Currency Collapses. Whats happening a weakening dollar pushes inflation up. The Fed has not budged on rates. Consumer spending is rising faster than inflation. The talking heads are saying [goldilocks] The Fed wants a strong dollar but is dead set against inflation rising. To raise the interest rate would mean the dollar would fall further. To lower the interest rate would strengthen the dollar but speed up inflation. I say Fed predicament. Rock and hard place.

 

[FundSurfer]

I say Fed predicament. Rock and hard place.

This is why I expect the Fed board to begin barking like dogs. They may try to move the market with their voice.

 

[nnuut]

Thanks for sharing the charts Bullitt very helpful. The big reason I've been shying away from the I fund is this very weak dollar. I can't put my finger on why the dollar is so weak.

This is the PLAN!!!! Weak dollar allows the USA to compete with the other third world countries in the Market place. Get used to it, just remember don't travel overseas, you can't afford it!

 

[fabijo]

To raise the interest rate would mean the dollar would fall further. To lower the interest rate would strengthen the dollar but speed up inflation.

I thought the opposite would happen. Lowering rates would make the dollar even less valuable because there would be more dollars available.

 

[Brett]

I don’t understand this “Fed injects 38 Billion to shore up support for sagging markets thing. Where did the Fed get this money? If they just printed more, then what good is it; doesn’t it just devalue what is already in circulation? I would think, but don’t know, that it would cause some inflation. I would have also guessed that the dollar would be devalued more and cause gold to shoot up. But it seems that none of that has happened. Can anyone explain to me what the Fed did last week and what effect it will have on the economy and markets? Thanks.

 

[FUTURESTRADER]

I don’t understand this “Fed injects 38 Billion to shore up support for sagging markets thing. Where did the Fed get this money? If they just printed more, then what good is it; doesn’t it just devalue what is already in circulation? I would think, but don’t know, that it would cause some inflation. I would have also guessed that the dollar would be devalued more and cause gold to shoot up. But it seems that none of that has happened. Can anyone explain to me what the Fed did last week and what effect it will have on the economy and markets? Thanks.

Maybe the helicopter money bernanke was talking about before he donned the chief's hat?

 

[350zCommTech]

The dollar is down a little today, but gold is up 2%? On the day before an important non-farm payroll report? What do these guys know??

 

[mayday]

A recession is deflationary maybe thats what the Fed wants.

 

[Gilligan]

I looks like the dollar is forming a pennant.

 

[Silverbird]

This is the PLAN!!!! Weak dollar allows the USA to compete with the other third world countries in the Market place. Get used to it, just remember don't travel overseas, you can't afford it!

And stop buying those unpatriotic expensive imports!(yeahright) :suspicious:

 

[tsptalk]

I looks like the dollar is forming a pennant.

That should be good for the I-fund - is that what you are suggesting G? In theory, the breakout would be down.

 

[Gilligan]

It appears that another pennant is forming. The dollar has been in an upward channel for the last couple of months but is it is getting close to long term upper resistance.

 

[Bullitt]

Decision Point possibly calling a bottom in the Dollar Index. Whether this could mean an IT or LT trend change, who knows.

View attachment 7480
Chart courtesy of: www.decisionpoint.com

 

[tsptalk]

Does that mean to favor the S-fund over the C and I funds?

 

[Bullitt]

Ha, they don't tell ya that much. I wish I knew.

S probably doesn't have as much exposure to the dollar as C though.

 

[WorkFE]

Does that mean your in for next week anyway

 

[Bullitt]

I've been about 50% in, 50% G Fund for a few months now.

I'm beginning to wonder here about the dollar correlation to the stock market. Looks to me like the Yen is about to make a serious reversal to the downside which should revive it's carry trade to some extent. If the dollar does strengthen here, does anyone think a decrease in speculation could be offset by Yen weakness?

Whenever something becomes followed by so many- meaning the weak dollar correlation to the stock market- it's more likely destined to fail than continue. When I can read about the dollar/stock market correlation in Time magazine, it's become too obvious.

I still believe that any strength in the dollar is a buying opportunity in hard assets, so I am prepared to add to any long positions I have when any upward moves briefly correct themselves. Also, watch for any countries that snap up gold at the 1050-1100 level in the weeks ahead.