The U.S. Dollar Index surged into a rebound yesterday. The rebound could fall apart, but I thought I’d give you the targets for a potential rebound, because this will affect gold, oil and the major stock indices, all of which have been moving inversely to the Greenback …
Since the buck has fallen so far, so fast, my money would be on a 50% retracement. That would set up some extraordinary buying opportunities in commodities and stocks, all of which should go lower as the dollar goes higher.
But this rebound doesn’t have to happen. Today should be an important day and give us more clarity. Let’s see if the dollar can close in the black today.
Meanwhile, until this chart improves, the real economy won’t improve …
Hat-tip: The Big Picture
You can check out some more interesting chart — contemplating long-term trends that may determine The fate of nations at The Animal Spirits Page.
NEWS YOU CAN USE
Commodities Rally to Continue, Slump Ends, Barcap Says: Technical Analysis
Commodities, up 10 percent this year, are set to extend gains after breaking through a key chart level, according to technical analysis by Phil Roberts at Barclays Capital.
Commodities Record Biggest Drop in Six Weeks, Led by Energy, Agriculture
Commodities fell the most in six weeks, led by energy and grains, as a rebound by the dollar sapped demand for raw materials as a hedge against inflation.
Crude Oil Advances as Goldman Sachs Forecasts Rally to $85 by End of Year
Crude oil rose after Goldman Sachs Group Inc. said prices may reach $85 by the end of the year and extend gains in 2010 as demand recovers and supplies shrink.
XX Sean’s note — of course, Goldman Sachs is playing the oil market like a kettle drum. The only company on Wall Street that is more shameless in talking its book is Pimco (through Bill Gross)
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{ 2 comments… read them below or add one }
USD holding up well … again, everyone is expecting the dollar to collapse ….. too much negative sentiment = Mr. Market does the exact opposite … Summer Rally in stocks is questionable now … humm, changes my roadmap ..
As long as the “Federal Reserve ” and Central Banking” are used by your writers as the normal entities for describing US Monetary Policy, your use of the term “Greenback” to describe our Dollar is redundant. Please have your scribes look up the definition of the the word. Lincoln and Hitler used them, (Greenbacks) for the good of their respective Countrys in time of dire need. Too bad Obama is so scared, being the Puppet he is, to actually initiate actions such as above to get this Country out of the monetary quandry it “suddenly” finds itself in.