Memorial Archives

The Ailing Greenback
posted Jul 7, 2004 at 06:39PM

Have you heard many pundits/analysts waxing bullish on the dollar? Me neither and quite frankly I'm feeling a little lonely.

There is much about the current environment though that reminds of the major indexes as they were heading into their March lows. Bearish rhetoric was hitting extremes with no shortage of reccomendations for "massive short postions" and water-fall declines and the el grande wave 3 of 3 of 3 of 3...going down.

Of course that was at the height of duct tape hysteria and although every chart and momentum indicator was reinforcing the view of major down force a lot of other stuff, Macclellan oscillators, Advance decline lines etc was pointing to a major buying opportunity.

Of course currencies are not stocks and a lot of indicators that are available for equities are not available to me for the dollar.

Instead of duct tape hysteria we now have inflation scare...this AFTER oil is up to $40 and AFTER housing prices have gone to the moon.

Personally I think that there are a lot of signs that the purchasing power of the dollar is going to go up. Despite record rebates Detroit can't give cars and trucks away. Pretty soon anyone who wanted to buy a house will have done so and the prices of houses are going to drop. And not only that but everything needed to build houses from wood to copper to bricks are going to go down.

China fill the gap? Dont't think so. China is not an economy. It is a labour pool designed to service the US consumer and the US consumer is showing signs of pulling in his horns.

In the end, if the USD was going to collapse, the HUI wouldn't be struggling to regain its 200dma

Well that's my story and I will stick with it..for tonight anyways.

Daily Chart

Other Short Term Charts

This not counting the head and shoulder patterns that could be drawn in. No doubt about it - the bears have lots of ammo.

Weekly Chart

Monthly Chart

A cautionary tale again...note how simply chaing from "line" to candlesticks can affect where trendlines go.

Bullet Bullet Bullet