Wednesday, May 20, 2009

Weak Dollar, Strong Commodities

We're seeing the U.S. dollar break down versus the euro (top chart) and oil (bottom chart) break to the upside, with gold making multi-week highs as well.

With low interest rates and rising national debt, the dollar is not as attractive as a currency, with several countries expressing interest in further diversifying their reserves. With the Fed contemplating further "quantitative easing", the market fears that the dollar printing press will be working overtime. That is lending support to commodities denominated in dollars.


DmytrenkoAV said...

Think you mentioned about very long term trend. Now this factors dont influence on trends a lot. Still inflation's data is low.

Nir said...

Dear Bret,

I'm reading your post for a while and I'm one day trader that suffer from "emotional bias" effected my trading. I also read the chapter "change" from your new book. So first thank u for all of your posts.
Now, I found out the most damage feeling that I have is – over confidant, when I'm sure that I have to buy or sell for 100% (and more) When I have this feeling that the big break out or the big break down is no here and I just need to ride on the wave – that cause to the biggest damage and biggest lose , It's also effect on the SL points and the TP point (because when u are so sure that u going to win the SL if too far and the TP never enough).

Do u have any recommendation how to control the over confidant feeling? Any means that can help control or reduce the over heat?
Nir, Israel

ainkurn said...

my thoughts exactly. I have been shifting a lot of my dollars towards oil, commodities, and agriculture. I am also considering a short-dollar ETF as well.