Short the dollar for a trade??? I would agree that the long term trend for the dollar should be up, but I wonder if the Fannie/Freddie bailout has put a short term top in the dollar. The bull case is solid: 1. Global growth slowing more than US in coming months 2. ECB monetary policy has not taken into consideration slowing regional growth 3. 6 year Bear market for dollar But to date there has not been a sustained pullback of the USD. My sense is that this move is getting exhausted and when analysts begin talking seriously about the amount of mortgage liabilities that the Fed has backstopped, some serious concerns may start making headlines. Full Disclosure, this morning I took positions in the following as per my analysis: UDN @ 26.85 XME @ 53.25 OIH @ 156.5
Forget about the fundamentals. The fact that the FXE could not make a new low and just traded all the way back to nearly yesterday's highs is VERY CONSTRUCTIVE. This move is what is producing a nice rally off the lows in the OIH and Energy Complex. Good Luck!
I don't know if shorting the dollars will be a good trade. The market is freaking sick now. How in the world with the news on Freddie and Fannie push the stock market at 3% each, dollars go up, metals go down. The money supply was double over night, and the reaction to this is extreme possible.
You obviously aren't in front of a trading screen right now . . . the Euro is putting on a very nice march up to yesterday's highs. The short-covering alone could produce a rally in the Euro that takes it back up to the 10-day MA. Watch today's price action. Trade off of it. It's that simple.
wonder what the correlation between energy/commodity stocks against the $ is now. xle and xlb look like they are trading -1 right now. Why even bother with stocks or commodities the govts are so involved might as well just trade the $ pairs.
XME also double bottomed with its Jan. lows today @53 and OIH is getting close to doing the same. If the relationship between the dollar and commodities still exists, I'm thinking we're close to a short term counter trend.
The commodity stocks have gotten too beat up in the last two days to put out shorts. Sell the dollar, financials,
Thanks, but I didn't say to short the commodities but rather a "short term counter trend" rally looked possible with the metals double bottoming and the dollar maybe topping. I think we're on the same track with the dollar but I'm worried about the Fiancials given their run up ... and the LEH selloff.