Thursday, November 30, 2006 11:06:23 AM
GM, Wonderbuy, yesterday I tried to post the following as a reply to your post, but it wasn't working, so here it is.
Have a good day.
USD & EOM, yes, we could see the pattern during the last few months. It seems that SM (smart money) is taking profit just before the EOM so that they know that the EOM market psychology will buy the dips; hence, no technical damage will occur. Even though EOM pattern does not work in 100% of the time, it certain repeats itself often enough.
Dollar and Oil are contra-markets, so as USD breaks down OIL would break out. You quoted a very good article on USD. These are USD charts which are showing the break down. This will cause some crisis. Some would sell the financial market while others could buy US markets since they could buy at lower prices with lower USD.
Anyhow, I am not a proponent of Financial trading higher at this point.
My previous comment on USD.
"$USD is breaking down while Energy is breaking out as shown on the $NATGAS and $XLE. Of course $CRB would be breaking out since Oil is heavily weighted. When we consider the relationship among $USD, $WTIC and $SPX, we would not have 1995 bubble up scenario. With the value of our currency and the amount of debt we have, I do not think that we will repeat the 1995 scenario where $SPX traded up at the same time when $USD traded up. So, $USD is devalued as well as our stock market meaning that our currency is getting worthless if we continue to bubble up financial market.
We need to watch USD carefully since it will impact oil price and also foreigners’ investment. Some would be losing money by investing US stock market, but others would start to buy US Stocks because it is cheaper to buy with lower USD? This sounds chaos to me when we think about cascading effect of bubble collapses.
The problems get to a climax at some point and we need to take a serious measure to correct the problems like what we are having and what we have seen here, as an example.
I hope that we are not creating another bubble. You, I and others will live through to see what market will do whether it will create another huge bubble or Dr Bernanke is sober enough. Sure, Pres Bush will leave legacy…. Of… He didn’t create 1995-2000 bubble which he lived through the consequences."
Have a good day.
USD & EOM, yes, we could see the pattern during the last few months. It seems that SM (smart money) is taking profit just before the EOM so that they know that the EOM market psychology will buy the dips; hence, no technical damage will occur. Even though EOM pattern does not work in 100% of the time, it certain repeats itself often enough.
Dollar and Oil are contra-markets, so as USD breaks down OIL would break out. You quoted a very good article on USD. These are USD charts which are showing the break down. This will cause some crisis. Some would sell the financial market while others could buy US markets since they could buy at lower prices with lower USD.
Anyhow, I am not a proponent of Financial trading higher at this point.
My previous comment on USD.
"$USD is breaking down while Energy is breaking out as shown on the $NATGAS and $XLE. Of course $CRB would be breaking out since Oil is heavily weighted. When we consider the relationship among $USD, $WTIC and $SPX, we would not have 1995 bubble up scenario. With the value of our currency and the amount of debt we have, I do not think that we will repeat the 1995 scenario where $SPX traded up at the same time when $USD traded up. So, $USD is devalued as well as our stock market meaning that our currency is getting worthless if we continue to bubble up financial market.
We need to watch USD carefully since it will impact oil price and also foreigners’ investment. Some would be losing money by investing US stock market, but others would start to buy US Stocks because it is cheaper to buy with lower USD? This sounds chaos to me when we think about cascading effect of bubble collapses.
The problems get to a climax at some point and we need to take a serious measure to correct the problems like what we are having and what we have seen here, as an example.
I hope that we are not creating another bubble. You, I and others will live through to see what market will do whether it will create another huge bubble or Dr Bernanke is sober enough. Sure, Pres Bush will leave legacy…. Of… He didn’t create 1995-2000 bubble which he lived through the consequences."
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