Friday, August 15, 2008

Goldman calls a bottom on the US dollar (Climateer beats 'em to it)

From FT Alphaville:
As the dollar rallied for a tenth consecutive session on Thursday, Goldman Sachs rather excitedly reversed its outlook for the currency.

“The dollar has bottomed!” analysts led by Thomas Stolper wrote. “Dollar lows are almost certainly behind us.”

Stolper’s 3-month, 6-month and 12-month euro forecasts are $1.45, $1.50 and $1.40; over the same timeframes, he expects the dollar to reach Y110, Y108 and Y114.

Goldman had previously forecast $1.56 vs the euro within the next three months, and had predicted Y106 for the same period....MORE

Back on April 24, two days after the dollar set it's then all time low versus the euro at $1.6018 we posted "Europeans, Buy Those U.S. Assets NOW" (see note below). On July 15 the euro marginally exceeded that mark, trading at $1.6038. Last I saw it was quoted at $1.4682.

This will set up the next decline in the stock market (a lesson I learned by paying full-boat tuition to Mr. Market):

...I read Bonddad, not sure what he’s waffling on about.
Here’s something a bit more direct:
Five-six months after the intermediate bottom for the dollar, 1.51-1.53 USD/EUR; just after Ma & Pa decide to call that broker feller and my sophisticated European friends are comfy with the currency bonus on their equity trades, look out below.
At least that was the lesson of the Louvre Accords.
If correct, “Sell in May and go Away” might be too late

Comment by Climateer - November 23, 2007 at 1:02 pm
Posted at the WSJ's MarketBeat blog

Here's the chart for that call, you can push the 5-6 months forward from the July dollar low to approximate the next market peak. If the bear market is to remain intact the next high should be lower than the May 2 closing high of 13,058. Best guess would be Inauguration Day for the 44th U.S. President.

Chart for Dow Jones Industrial Average (^DJI)

NOTE: From MarketBeat-