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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Square_Dealings who wrote (21066)	10/30/2004 10:37:56 PM
From: Carlos Blanco	Respond to of 110194

where i come from (south america) the dollar has been viewed as the ultimate liquid store of value for as long as i can remember. if i were to chart that sentiment, it would show an overbought trend with RSI at 100 & MACD histograms above 0 & 99.9% bullish consensus lasting several decades. the amount of dollar asset accumulation that has occurred by individuals, companies, and central banks is not trivial. a lot of those dollar assets (especially outside of asia) are held on the premise that they will keep their purchasing power better than other alternatives. a premise that has not fallen out of mainstream favor...yet. if & when the snowball starts gathering downhill momentum, i'd expect increased volatility, discontinuities, and stronger-than-usual trending. there's too much supply to dispose of in an orderly fashion. anyone trying to get cute with technical, sentiment, or valuation indicators will likely exit too soon, just like i mistakenly exited my tech positions in 1998. we contrarians need to remember to also be contrarian about the continued effectiveness of historical contarian indicators :)