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US Dollar Breaking Down
Posted on 09/25/2006 16:39:03 | Link | Post Comment
0920 EDT Tuesday April 04 2006
Good Morning: Following a briefly strongish start to April as we suggested might happen, the US Dollar could not sustain these early gains and began to quickly unravel yesterday and this has continued overnight as overseas currencies began to soar against the US unit.
This could have positive implications for a number of markets, especially the Precious and Base metals markets as well as the grains and other US denominated commodities. It could also put further upward pressure on Crude Oil prices, which eased back some yesterday, following a blistering week of upside activity. To some extent, these commodities may have anticipated a Dollar break and are correcting.
Stocks had a very volatile start to the month of April and after setting numerous new highs along with many indices, there was a significant intra-day series of reversals that have been a pattern of late. Recently the markets have managed to shrug off these events that occurred in March to ultimately close stronger, but they are becoming a little more deep and dramatic as evidenced yesterday, so it will be important to see how the week unfolds from here. It is not unusual to see a very volatile start to the month following a very strong quarter, such as we just experienced and as long as the basic uptrend remains intact, the Equity indices could still rebound and run to higher highs. Still, notwithstanding this weeks volatility thus far, wherein the Equity markets may actually find help from a weaker US Dollar: As we stated yesterday, it is important that we get through the month of April as we did March, however, even if we do experience something more of a pullback, that would not necessarily be a negative, as we can foresee one scenario, that following a pullback or consolidation in April going into May we could still have a very strong run into the Summer in what could be one of the best Summer rallies in some considerable time.
Trade Well
From the Desk of Savant
Good Morning: Following a briefly strongish start to April as we suggested might happen, the US Dollar could not sustain these early gains and began to quickly unravel yesterday and this has continued overnight as overseas currencies began to soar against the US unit.
This could have positive implications for a number of markets, especially the Precious and Base metals markets as well as the grains and other US denominated commodities. It could also put further upward pressure on Crude Oil prices, which eased back some yesterday, following a blistering week of upside activity. To some extent, these commodities may have anticipated a Dollar break and are correcting.
Stocks had a very volatile start to the month of April and after setting numerous new highs along with many indices, there was a significant intra-day series of reversals that have been a pattern of late. Recently the markets have managed to shrug off these events that occurred in March to ultimately close stronger, but they are becoming a little more deep and dramatic as evidenced yesterday, so it will be important to see how the week unfolds from here. It is not unusual to see a very volatile start to the month following a very strong quarter, such as we just experienced and as long as the basic uptrend remains intact, the Equity indices could still rebound and run to higher highs. Still, notwithstanding this weeks volatility thus far, wherein the Equity markets may actually find help from a weaker US Dollar: As we stated yesterday, it is important that we get through the month of April as we did March, however, even if we do experience something more of a pullback, that would not necessarily be a negative, as we can foresee one scenario, that following a pullback or consolidation in April going into May we could still have a very strong run into the Summer in what could be one of the best Summer rallies in some considerable time.
Trade Well
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