I wanted everybody to see this, as today may have marked the beginning of something quite important. The US Dollar (/DX futures, or USD) had a pretty nasty day today. It’s resistance held around 83.40 and cratered through the Pivot Point. Over 100 point move lower, and looks like we will be testing early August lows before long at 80.17.
What this means for the stock markets is positive in the short-term. Metals, ags, multi-nationals and others will benefit from a lower dollar, but only for a while. In the long run, it’s bound to be a negative as the “true” market will realize what is at hand and what has resulted from the endless printing of money by the Fed.
My first target range is the 79-81 area, with further deterioration expected. Ultimately we may see 70-73 on the Dollar…….
…..Which is why I also believe gold, silver and miners of these metals is going to be the only place to be for a while. These commodities are, of course, very volatile, but the party is just beginning and I’m willing to hang on as the cycles are squarely in our favor for the next 2-6 months.
Trade the extremes and manage risk accordingly.