Wednesday, November 25, 2009

Dollar Sliding Into New Trading Range

From MarketBeat:
The euro hit a fresh high for 2009 at $1.5144 as selloff in the greenback took another big jump in New York afternoon trading....
Making this pronouncement from a week ago look a bit silly:
I don't have anything concrete I can point to but 1.50 EUR/USD almost feels as if someone has drawn a line in the sand. As more and more money piles into the trade without movement past that line you start to lose the mo-mo traders and the psychology can shift fast.

If the buck were to turn and head back to say, 1.20, the results for equities and gold would be painful.
I'm just sayin'...
It's either one of those "I may be in error but never in doubt" statements a rookie would never refer back to or it's a Maxwell Smart moment: "Missed it by thissss much".
[or it's like spring '08 when you said $1.53 and we went to $1.59 in July -ed]
I'm leaning toward Humble Student of the Markets' interpretation:
As good market analysts know, when the public gets on board a story, chances are everyone is already in the trade and the trend is likely to reverse soon. So it is with interest that I got the following viral email entitled "What good is a Dollar?"

The answers: Make a penguin
A dragon:




You get the idea. With investor bearishness on the US Dollar at an extreme reading, who is left to sell?