Dave Gore's Trades That Make Sense Message Board

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Strategies & Market Trends : Dave Gore's Trades That Make Sense

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To: Dave Gore who wrote (8315)	6/19/2002 8:12:11 AM
From: The Vet	Read Replies (2) of 16631

"What happened overnight?" US dollar hit new lows - now 109.69 and the Euro went over .95, now .956 and the yen joined the party and broke 124, now 123.9. Folks in the US... you cannot trade in a vacuum. There are other countries and other currencies out there. Overseas interests hold some 40% of US financial products whether you like it or not. Even though the market is closed all of their holdings, stocks, bonds etc. dropped up to 1.5% last night and even if the stock market holds steady they are losing in their own currency terms on a continuing basis. To stop losses they SELL! They sell the underlying security first then they sell the US$ to convert back to their own currency which they can use to buy assets in their own countries. This has a double effect; the first sale drops the stock price, the second drops the US$ and so the process feeds on itself... Anyone who does not have a screen up with forex quotes for major currency movements while they trade is only seeing part of the picture... pssss it affects gold too...

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