Wednesday, October 14, 2009

Dollar is scraping bottom

Here is an image of the front page of today's Chicago Tribune business section. I think it shows that bearish sentiment about the U.S. dollar is pretty extreme. I think that the 75 level in the dollar index will prove to be strong support. The next big move in the dollar will be upward from here and should carry the dollar index to 100 or higher.
Posted by at

13 comments:

  1. AnonymousOctober 14, 2009 at 12:48 PM

    Carl Sir:

    You might at some point touch on the topic of decoupling, between the US$ and our own equity markets, since this has to occur in order to accomodate your long-term bullish thesis.

    Thank-you for your daily blog.

    ReplyDelete
  2. pejOctober 14, 2009 at 4:25 PM

    I hope you are right. I just closed my short USD a couple of weeks ago, thinking the bottom was in. Today, I actually went long the USD...
    You are not the first one to forecast a bottom unfortunately

    ReplyDelete
  3. UnknownOctober 14, 2009 at 5:19 PM

    i echo your logic.

    carl or others, what is so magical about the 75 level that is so different from any other level. upon review of the charts, there is nothing technical to suggest this is the final landing area. plus, i'd think we'd need a catalyst for this to occur.

    ReplyDelete
  4. adoOctober 14, 2009 at 7:09 PM

    If the US dollar is to rebound off the 75 index level, the stock market and commodity rally will take a breathe as liquidity tightens.

    How far do you see this counter-trend rally go?

    Does it mean that the 1120 level for S&P is the high for the short-term corresponding to the 75 US dollar index?

    ReplyDelete
  5. DMA TraderOctober 14, 2009 at 7:21 PM

    I still think a lot of people try to catch the us dollar index bottom but since all your contrarian articles have proven right i would not argue with you.

    ReplyDelete
  6. UnknownOctober 14, 2009 at 8:50 PM

    Care to explain the rationale behind your thesis?

    ReplyDelete
  7. qOctober 14, 2009 at 10:17 PM

    Hi Carl, Agreed on the US dollar. I posted on this bottoming process a few days ago and went long at the 22.40 target. -MK

    Here is the post:
    http://marketkarma.blogspot.com/2009/10/us-dollar-update-oct-11-2009.html

    ReplyDelete
  8. borisOctober 15, 2009 at 12:40 PM

    The Currency play is overextended, but could get even a bit more so due to the way the Dollar index is construced. While GBP and JPY were kind to Dollar lately the EURO/SWISSY/AUD/CAD pressured it down and that may continue for a while, while the bottoming process looks more like "making flattest pancake" contest, wherby the EUROS spread positively against GBP/YEN for X more weeks

    For My futurist charts on Dollar, just google "SHEKELS On DOLLAR" . Nevertheless our SEEFUTURE oil future charts show lower OIL soon and that does call, for stabilisation, at least in Dollar.

    GOod Trading All and thanks Carl for this wonderful site.

    ReplyDelete
  9. UnknownOctober 15, 2009 at 1:00 PM

    75 on the USD index is magic because it is the mid point between large trading range from 50 to 100, often prices reverse at mid point, so 100 is a must-hit point.

    ReplyDelete
  10. filipOctober 15, 2009 at 2:06 PM

    Any comment?

    http://mediadagboken.blogspot.com/2009/10/chicago-tribune-den-15-oktober-2009.html

    Or does "There´s no partying over DOW 10.000 this time" make it bearish?

    A Swedish magazine I read had the frontpage saying: New top soon to be replaced by a new one...

    ReplyDelete
  11. UnknownOctober 19, 2009 at 3:10 PM

    I also think that the dollar is due for a more sustainable bounce, but I have thought that way for 2 months now. I did see today though at http://www.goldalert.com/gold_price_blog.php that there has been some large speculative call buying in the dollar etf. I also read a really interesting article on the relationship between the gold price and the dollar in light of the Federal Reserve's monetary policies that I think is very useful for investors to read. It is titled "Gold Price Up, Dollar Down - Does it Really Matter?"

    ReplyDelete
  12. rosebud -October 23, 2009 at 8:08 AM

    too many bullish views on the dollar, I'm staying short!

    ReplyDelete
  13. DMA TraderOctober 29, 2009 at 2:54 AM

    right again

    ReplyDelete

Subscribe to: Post Comments (Atom)