Thursday, October 14, 2010

US Dollar Cannot Even Hold 5 Day Moving Average

Dollar bulls are now showing in the 3% range which is a similar reading to Euro bulls in late spring during the Greece crisis ... the euro was roughly 1.18 to the dollar, and people were talking par (1.00).  Now the euro just broke over 1.40.

This chart has a 1 day delay but similar to the 13 day moving average support on the S&P 500, we have such dramatic weakness that the dollar cannot even break OVER the 5 day moving average on a closing basis.  Today the dollar is down about -0.5% (off the worse levels of the day) but has continued the degradation.

So sentiment is in the right spot for a counter trend rally - now we need to see a technical reversal before declaring a move could be afoot.  Since all my short positions have been ripped away from me, I am using this as a pseudo short vs the market...but on a day like today when the mkt is down along with the dollar, it is useless.

Long Powershares DB US Dollar Bullish in fund; no personal position

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