everybody I read thinks that we have started a big counter-trend rally in the dollar -- same story every time we bump.
fleck addressed this tonight. here's what he said:
What Not to Defend in a Dollar Contra-Trend
Away from stocks, gold was down 1% and silver down a couple percent, before each closing down 0.7%. Pressuring the metals was more weakness in currency land, with the Japanese yen leading the downside. I have received quite a number of emails and seen quite a bit of ink spilled about the potential for a big contra-trend rally in the dollar. I talked about this a lot at the beginning of the year. I suppose it could still happen, but at this juncture, my hunch is there won't be a big dollar rally. Yes, people are bearish on the dollar, and that view is pretty widely held. But I see far more chatter about a big contra-trend rally for the dollar than about its impending crisis/collapse.
In fact, other than maybe Jim Grant, Richard Russell and myself, I haven't seen anybody talking about a real crisis. And, just because a lot of people are bearish on the dollar doesn't mean it has to rally, witness what has been happening in our stock market in the last year. Sentiment has been wildly lopsided and we still have gone up, which was also the case in the late 1990s. Fading markets simply because of psychology can make you look awfully clever sometimes, but it can also take you out of a bull market. Though I don't know what's going to happen, my guess is that the foreign currencies and metals will be kind of rangy for a while, with a continued upside bias. |
