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

Time to Bet on a RISING U.S. Dollar?

Currencies / US Dollar Mar 13, 2011 - 04:59 AM GMT

By: DailyWealth

Currencies

Best Financial Markets Analysis ArticleDr. Steve Sjuggerud writes: You hear it over and over...

"Because of all the debts and the deficits, the dollar is about to crash."


Yes, the debts and deficits will come home to roost in the long run...

But is the dollar going to crash right now? Right this second? Should you bet on it crashing tomorrow?

I say no... The dollar looks poised for a three-month rally, as I'll show you today.

Let's start with the most basic question first. When people talk about the dollar crashing, what do they mean?

Usually, they mean a trip to Europe will cost you a fortune, as an example... They mean a dollar won't buy you much outside the U.S.

By that standard, the dollar has already crashed... Goods in Europe are already 30% more expensive than the U.S. So the euro is expensive relative to the dollar. (Meanwhile, European countries have big debts and deficits, too.)

Longtime DailyWealth readers know we size up just about every investment opportunity on three factors. We look for things that are 1) cheap, 2) hated, and 3) in an uptrend.

Let's take a look...

The dollar is cheap... as I described above. The euro is expensive. You're reaching the point where Europeans can buy stuff from the States, ship it home, and sell it for a profit. This situation can't last forever.

The dollar is hated... Currency traders have bigger bets against the dollar than at any time since late 2009 – the last time the dollar bottomed and kicked off a massive rally. And our friends at SentimenTrader say investor sentiment on the U.S. dollar is more bearish than on any other commodity... a strong contrarian sign. Sentiment signals usually are good for about three months.

The uptrend? It's not here yet, but it's close... The dollar has strengthened this month. The euro topped out on March 4 at $1.40, and it's already down to $1.38. Our True Wealth Systems computers tell us the dollar only needs to rise 1.5% for it to be in an uptrend – in "buy" mode.

If the U.S. stays on its path of ever-increasing debts, the dollar will surely be the casualty.

But with history as our guide, the dollar has a chance to have a three-month rally... particularly once we see a real uptrend kick in. Then we'll have all three factors in "buy" mode.

If you're planning on betting against the dollar today, I urge you to be careful...

The dollar is cheap, it's more hated than it's been in years (the last time it was this hated, it started a major rally), and it might be starting a new uptrend now.

These are the conditions for a "buy," not a "sell."

While you may want to bet against the dollar, I think you'd be better off doing nothing today...

Too many people are already betting against the dollar right now, and many of those are new bets. The typical outcome in this situation is a somewhat violent move upward that knocks those new speculators out of the trade.

In short, if you want to bet against the dollar, consider waiting instead... You may get a much better opportunity in a couple months.

Good investing,

Steve

P.S. Come and say hello... I don't usually speak at conferences. But I will be speaking at the upcoming Global Currency Expo in La Jolla, California. Here's a direct link to the conference's promotional video. I'd love to see you there.

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2011 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

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.

Daily Wealth 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