Is consensus on the US Dollar finally Bearish Enough?
Now it might be. When I re-shorted the US Dollar on October 20th, my answer was no. Everything has a time and price.
There are plenty of negative catalysts for the price of Burning Bucks that are now in the rear-view mirror:
- Bernanke - pandering to the political wind last week, keeping rates at an “emergency rate” of ZERO percent
- G20 – no one trusts Geithner or his suggestion that countries “take a chance again on the American economy”
- US Employment – that was a nasty report on Friday
However, in my risk management model at least, sometimes the best catalyst simply is price.
In the Chart of The Day, Matt Hedrick and I show a Bombed Out Buck price of $75.01 on the US Dollar Index. Do not mistake our call to cover our short position in the US Dollar for anything other than what it is – an immediate term (3-weeks or less) TRADE call.
The Bearish Formation (negative TAIL, TREND, and TRADE) for the US Dollar remains. But +1-2% rallies in the Dollar can wreak havoc on anything priced in dollars.
We’ll be outlining our views of price and duration on our long standing Burning Buck investment theme on our Macro Strategy Conference Call today, at 1PM EST. If you need access information for this call, please email .
Keith R. McCullough
Chief Executive Officer