On April 27th, I wrote a note here saying that I did not want to own the US Dollar until it traded down to 71. On that day, we were trading at 73.70. Five trading days later, the US dollar fell to 72.86, which was the lowest tick since July of 2008. I felt that we would grind down to the 71 level.
I was wrong. Clearly wrong, as born out by the market’s action.
Interestingly, the US dollar found support within days of the IMF warning that the US was on its way out and would bow to China in the next 5 years. When was the last time a bureaucrat was right about anything, other than what white wine went best with dinner?
So, Ok, I didn’t pick the bottom. No big deal. Leave that to the uuber traders of the world.
So what to do? Look for dips to buy. Sell the 76.25 level, sell the 77.25 level and sell the 78.30 level. But look for dips to buy. We could conceivable rally back up to the 81.50 level we were at just 5 months ago.
Stronger dollar, intuitively suggests we should see commodities in general drop in price. This should continue to put pressure on the sell side for grains, metals, and crude oil and its products.
Market forces are going to be responsible for this correction. The cure for higher prices in general, is higher prices.
Of course no one bothered to share this fact with politicians. Surely political nut jobs on the radio from the right or the left would never acknowledge market forces, because it does not fit in with their bizarre view of the world.
That is All.
CER
