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Friday, August 14, 2009

Has the Dollar Bottomed?

Seems every trader is latched on the $$ - market relationship.

I just don't have a good feeling about the $$ being a "sure thing" low. The fact that EWI is convinced makes me cautious. The pattern is, again, too obvious. Too contrived. Too perfect. Yes sentiment reached pretty low, but again, I haven't seen a lot of media stories on the dollar's demise. I am waiting for that.

I am not sure about the dollar. It can turn early ahead of market turns. So it doesn't need to remain perfectly in "sync" on a last market rally up (if it happens).

I think its faulty thinking to expect a dollar down - market up paradigm or a dollar up - market down paradigm to last forever. Its faulty thinking if you expect it to occur at all times. I do think the dollar will ultimately rally during P3, I am just not sure if its low has occured just yet.

And the chart of UUP doesn't show any positive divergence really on its weekly chart. So I just am not sure. I' d rather take a contrarian stance (as related to the usual group of readers and traders on our web of trading/EW blogs) on the dollar for the moment and suppose it still has yet to find a true bottom.
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