Friday, March 7, 2008

the poor child of the double mandate

the more I think about the dollar, the more it worries me.

it's hard to think dispassionately about the one's country when doing financial analysis ... to question whether it's really worth what everyone thinks.

trying to avoid any kind of emotional feelings about the USA as my country, I can't help but see major problems.

first of all, the charts on most other currencies are extremely bullish, essentially mimicking the nasdaq before it broke out in 1996. look at this:
http://finance.yahoo.com/echarts?s=%5EIXIC#chart3:symbol=^ixic;range=19900301,19940303;charttype=line;crosshair=on;logscale=off;source=undefined


and then a currency like these:
http://finance.yahoo.com/echarts?s=%5EIXIC#chart3:symbol=^ixic;range=19900301,19940303;charttype=line;crosshair=on;logscale=off;source=undefined
http://finance.yahoo.com/echarts?s=fxy#chart1:symbol=fxy;range=1y;charttype=candlestick;crosshair=on;logscale=off;source=undefined
http://finance.yahoo.com/echarts?s=FXA#chart1:symbol=fxa;range=1y;charttype=candlestick;crosshair=on;logscale=off;source=undefined

I am saying all of these need to be bought. other currencies are breaking out -- the inverse of our ever ailing dollar index. the chart on the dollar index now looks about as bad as anything can... a fibonacci line from 6/2/02 to the 12/31/04 low form a perfect 37% retracement around 11/28/05...

fibonacci projects another 15% move down to the 62 area. a bad jobs report, plus by ol' eazer ben on march 18, could well send the dollar there in a hurry.

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