Dollar Hit Hard
November 24th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
From a few days ago: U.S. Dollar Index Shows Strong Divergence Pattern:
There’s potential for a sharp move lower on the dollar in the near term. Indicator trends should be moving with the index trend, but the trends on the indicators have turned down. The shooting star-type candle is more evidence that we’re seeing divergence.
Dollar holders: Watch out.
I’ve reduced my dollar holdings (again) by going back into DBA for now.
In case you didn’t catch it the first few hundred times I’ve made this point: The commodities move opposite to the dollar. So, if we get a break in the dollar… The oil chart will really have my attention.
Will there be follow through to the downside? Maybe. The chart is leaning nicely now, but I think it depends on the stocks. Any stunning down moves on the stocks, recently, resulted in the dollar moving higher. If Hank can’t manage a decent nonsense, crank short squeeze, more people will flee to cash.
Many of the foods and oil are right around their long term supports. The thing that frightens me is that gold chart. That thing has looked like poop on a stick for months, and, well… Wake me up above $850. (I know, it’s $830 now.)
