The Desperation of the Dollar Rally Crowd is the Mirror Image of
the desperation of the Oil Bear Crowd. Each takes the most minor, pathetic counter-trend reversals in what are otherwise Monster Size Trends as a big change in the weather. It would be funny, were it not so tragic.
First, my fellow oil bulls will easily recognize the cheerleading that has accompanied every 10-20% pullback in the price of oil over the past 5-6 years. Every time, of course, "it's an astonishing crack in the oil bull market". Hilarious. Like many observers of GOOG, otherwise educated persons have had their minds short-circuited somehow now by a "10 dollar" pullback in oil from 100.00 Sheesh. What were the sizes (dollar amounts) of Oil's pullback when it was trading at 25.00, 50.00 and 75.00? Yeah. You guessed it. The percentage-size of the pullbacks have been amazingly consistent.
Meanwhile, this powerful multi-year downtrend in the USD has been "called off" more times than I can remember. For a portrait of Dollar Rally Psychosis, check out Kaplan's newsletter titles this year, starting in December, 2006:
truecontrarian.com
The USDX has marched like Patton's Army from 120.00 to 74.00 over 5+ years, and now, suddenly, everyone greets the move from 74.00 to 77.00 as a "powerful dollar rally." Like we haven't seen a zillion of these the whole way down? You can't make this stuff up.
I measure the time between this dollar rally of the last 3 weeks, and, the next pricing in of another FED rate cut (and the USDX moving down again) in days.
Look at one of my favorites, the $CAD. I was really hoping they could get the Loonie down to at least .9500 after the spike to 1.10. But they could not quite get it that far.
Frankly, the $CAD move is looking alot the gold move of early 2006. A monster spike followed by about 10 months of high level consolidation. If that's the case, that's great, because accumulating the Loonie as it dances around parity is a great deal.
25 Year Dollar Chart (monthly)
stockcharts.com
Gregor |
