Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Hated U.S. Dollar Might Rally

Currencies / US Dollar Nov 06, 2009 - 07:01 AM GMT

By: Graham_Summers

Currencies

Best Financial Markets Analysis ArticleFew essays I’ve ever written have drawn as much ire as the ones in which I propose that the US Dollar might rally. The US Dollar is indeed hated, so hated that people will hate you just for considering that it might rally.


Virtually every day I receive emails from people asking me about the coming massive US Dollar devaluation or when the Zimbabwe-esque hyperinflation will hit. What’s striking about this is that I receive more of these sorts of emails today (when the Dollar’s at 76 or so) than I did last summer when the Dollar hit a 30-year low of 72.

In fact, the Dollar is so hated that it recently broke a nine-month downtrend and virtually NO ONE noticed. I know you probably think I’m a jerk just for mentioning this. But you can see it for yourself:

Of course, this could simply be a “head fake” as the Dollar continues downward to test its 2008 lows. But I can’t help wondering if this recent move might be the start of something bigger: a potential Dollar rally that would catch 98% of the world off-guard (98% of investors are bearish on the greenback).

If you’ve been reading my essays from this week closely, you know that MOST of the stock market gains generated by the US markets have come from the Dollar losing value. Indeed, the US Dollar and the stock market have been trading at a near perfect inverse correlation for months now. Every day that stocks rise, the Dollar falls and vice-versa... Which is why I’ve noticed that the US Dollar broke its downtrend the EXACT same time that US stocks broke their uptrend.

The market gods are not without their sense of irony. And how ironic would it be for the US Dollar (the most hated investment in the world) to be the one asset that might be about to rally, crushing stocks and commodities (both of which have rallied hard largely due to Dollar debasement)?

The issue now is if the Dollar remains above its former downtrend line. If it does, then we may in fact be seeing the above scenario play out. I realize that it’s somewhat absurd for me to even suggest the Dollar might rally after all the bailouts and stimulus. But isn’t it odd that the Dollar today is actually HIGHER than it was in 2008 BEFORE the stimulus and bailout madness began? Shouldn’t the Dollar ALREADY have broken below its 2008 lows based on all the fiscal insanity going on?

Or is it possible, no matter how unexpected, that another financial Crisis is currently beginning to unfold… and the Dollar’s moves are a sign that the investors are already beginning to shift towards safe havens like they did in 2008?

I am not claiming this is the case. But the above charts indicate something very odd is going on with the Dollar in relation to stocks. I’ll be watching this development VERY closely going forward.

I highly suggest you do too. If the Dollar DOES rally, it’s going to catch EVERYONE by surprise. Stocks in particular will collapse staging a virtual repeat of 2008.

I’m already preparing investors for this eventuality with a FREE Special Report detailing THREE investments that should explode when stocks start finally collapse. While most investors are complacently drifting towards the next Crisis like lambs to the slaughter, my readers are already getting ready with my Financial Crisis “Round Two” Survival Kit.

The investments detailed within this report will not only protect your portfolio from the coming carnage, they’ll also show you enormous profits: they returned 12%, 42%, and 153% last time stocks collapsed.

Swing by www.gainspainscapital.com/roundtwo.html to pick up a FREE copy today!

Good Investing!

Graham Summers

http://gainspainscapital.com

Graham Summers: Graham is Senior Market Strategist at OmniSans Research. He is co-editor of Gain, Pains, and Capital, OmniSans Research’s FREE daily e-letter covering the equity, commodity, currency, and real estate markets. 

Graham also writes Private Wealth Advisory, a monthly investment advisory focusing on the most lucrative investment opportunities the financial markets have to offer. Graham understands the big picture from both a macro-economic and capital in/outflow perspective. He translates his understanding into finding trends and undervalued investment opportunities months before the markets catch on: the Private Wealth Advisory portfolio has outperformed the S&P 500 three of the last five years, including a 7% return in 2008 vs. a 37% loss for the S&P 500.

Previously, Graham worked as a Senior Financial Analyst covering global markets for several investment firms in the Mid-Atlantic region. He’s lived and performed research in Europe, Asia, the Middle East, and the United States.

    © 2009 Copyright Graham Summers - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

    Graham Summers Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in