Tuesday, October 19, 2010


I posted last week that the dollar had broken lower support following reading Denninger's post.  That was a case of seeing the tree before the forest (paying too much attention to intraday moves, not the sum of intraday moves).  Plus, I didn't do my own due diligence.  It really never broke the main support.  I apologize, but if you were just now becoming a bear on the dollar after a 15% decline (or the 33% decline this decade), you are already late to the party.  I've seen this three bottom pattern on other time scales and in many markets.  If it comes to fruition, dollar bears beware.  See the bottom of this post for one of the Euro and the Swiss Franc, but over a much shorter time-span.  However, I don't think that any of the fiats will be substantially stronger than hard assets, if at all.

Yesterday's move in the McClellan was erased and then some today.  We've had redness show up several times in this index the past few weeks only to be overcome the next day by a green posting.  We will have to see if it happens again tomorrow.  If it does, more divergences will build which will eventually have to become undone.  Its current price of 2645 is pretty damn high by any measure.

Best of luck.

No comments:

Post a Comment