will the $ reverse in November and fall to new lows ? the attached chart is a longterm M $ Cash ( http://mrci.com/ lower left menu) not marked but is the current rally a C of a potential ABC begun in 2005 ? fibo from the euro 05 L the 61.8 is 1.33 and 50.0 is 1.38 do we presume that after the C's complete the euro's going to the Moon ? - 1.7 - 2.0 ??? it's not an ABC, the dollar will decline back to the L but just to form a base then rally ? euro's finished and $'s going to the Moon ? side question - what economic ramifications would cause the $ fall ? the subprime/credit crisis appears to have done nothing but good for the buck and now announced - 'it's over' ? - and if there's going to be a several year recession/depression, the only place to be is in the $ ???
i think the dollar will continue to strengthen until the deleveraging process completes itself. What we are seeing here isn't really more confidence in the US fundamentals, but rather flows of capital being brought back home. In fact, a further clue to deleveraging is the YEN.
Hi Wallace,... I tried to open the PDF,, (not able to) I would like to ask you this, I have been trying to get to know the the ADX as a signal for entering the market,.. Now I have been useing the Bollinger Bands, instead of the MACD, but either way when for example we see the over sold in the analysis tool being used either the (Bollinger Bands, or the MACD) as I am seeing right now after the USD/JPY sold off to the 101.62 area, Now the trend has been down, ... BUT it is in the oversold on the scale,(Bollinger Bands, or the MACD) it could mean a turnaround,...... However the ADX is at about 28 on the scale. ,... So the question is what is the ADX telling us.... to BUY or SELL, and of course the other analysis tools are showing over-sold. Thanks, PJ
Suppose that the dollar strength is in part caused by the failure of large firms, and the deleveraging/liquidation of hedge funds. They had dollar shorts and dollar hedges, they're forced to liquidate either because they're failing, they've failed, redemptions, or deleveraging for whatever reason. Then once the whole thing stabilizes - everyone who's going out has gone out, and redemptions have flattened out, etc., then the dollar weakness could resume, because the fundamentals are not in favor of the USD. The data coming out of EU is bad, but correct me if I'm wrong, the US data looks worse. ... which is pretty much under the same premise as what fseitun was saying. That's an opinion - feel free to vocally agree or disagree.
a cut is coming too. normally would be dollar negative and maybe a catalyst to bounce this massive dollar strength. however, in this mayhem - who knows...
bandaids aren't staunching the haemoriging of the financial decapitation some new crisis - large fed cut ? another bank fails ? - next week everyone buys gold, the $ dumps and euro flies the deleveraging is credit deleveraging isn't it ? financials trying to get out from under their debt. the feds and other countries have already thrown in a few trillion which didn't work and the 700B is going to do what ? i wonder about the 60B Credit Default Swaps mainly because i don't know who and what they're 'insuring' and what portion of the 60B is collateralized - or not and if the $ is supposed to be The reserve currency and the US is going down the tube, strong as it appears to be the current rally may only be a short-covering rally and if there's some 'tipping point' or 'straw that breaks the camel's back' next week, something catastrophic and not immediately fixable or able to be contained . . .
I'm kind of wondering if a rate cut actually <i>is</i> on the way. I feel like the prospect of an emergency rate cut has kind of gone away, especially if US stocks rally today (as I feel that they might). But the initial period of panic has subsided, and the dollar is coming back in a bit. Definitely the ECB, for example, has more room to cut rates than the US does right now - by keeping their rates respectably high, they now have room to cut when they need it, whereas the US doesn't. Do you know the extent to which the futures markets are pricing in or expecting a US rate cut?