The DXY Hit 72.00, in the midst of tricking data that Exports are starting to bubble. While I am still negative on the USD, and think it will go to 70.00 on the DXY, I sold my Silver Futures (DEC 2008) this morning when front month Gold hit 1000.00. I rolled everything into cheap LEAP calls on my favorite oil and gas producers.
I've been mapping out a model which has a commodity pullback starting when Gold hits 1000.00 or when the FED meets 18 March. It looks like those two events have basically arrived, at the same time. The FED is going to probably say that while they will do "lots more" they might hint that they have shot alot of bullets already. Meanwhile, several sectors including the DJUSEC are flashing export growth. With the end of Q1 coming, and lots of profits still on the table in commodity-land, I think it's time to be careful. Spring commodity rallies tend to end with massive pullbacks. As hedgies close books 31 March, I think a pullback is coming.
I think the DXY could hit 65.00 next year. I also think the DXY could sit around this 70.00-72.00 level for a while. We may see some cash flooding towards the USA buying our companies, and our products. While we are no longer a significant manufacturer, or exporter--we do indeed manufacture, especially Electronics Equipment and Components. We also have alot of Coal and Grains to export. None of this changes the underlying situation that the the USA (The Empire of Debt) faces. But, it does tweak at the margin.
Most anti-USD trades are very extended right now. Though, not all. Uranium, the CAD Dollar, The AUD Dollar, still look good to me. Congratulations again to JPY longs. How soon before the BOJ takes action?
Best to all. |
