Showing posts with label dollar. Show all posts
Showing posts with label dollar. Show all posts

Thursday, December 17, 2009

Has the US dollar turned? It certainly looks so.

Several major currencies are weaker against the dollar.  The Australian dollar, Euro, and Loonie are all trading past their 20,50 and 100 day moving averages. The Yen is above the 20 and 50 and nudging up against the 100 day moving average.  The concern over Greece is hitting the markets and causing a world wide derisking.  Is this the end of current US Dollar weakness? I think so.   The currency markets seem to trade on technicals quite a bit (I'm not an expert in currencies by any stretch of the imagination.)  and punching through all those moving averages it a big nail in the coffin of US Dollar weakness.

We'll see in a few months if I'm right.

Some pretty graphs to show you whats going on.  The Euro fall is impressive.







Monday, November 23, 2009

Contrary Copper talk part 2

I recently blogged about the rising copper inventories worldwide.   Copper inventories keep growing at an accelerated pace.

So why are prices rising as well?  I see a few items driving prices higher right now, those being the dollar, an expectation for a recovering worldwide economy, and strikes at copper mines in South America.


The recovering world economy and China specifically has been the standard mantra for why asset prices are rising, whatever the asset.  If China is rebounding, why are Chinese copper exports rising?  If China has a desperate need for copper right now why are the traders sending copper out of the country?  Don't know, but this does not coincide with the bullish copper thesis. 

There have been several strikes in South America at copper mines and several large copper mines have their work contracts ending in the next two months (Reuters list) .   So far all the striking mines have gone back to work and contracts at some mines have recently been concluded. The long running (40+ days) BHP / Spence mine copper strike just ended.  (Bloomberg)   Spence mine produced about 500 tons of copper a day so you can add that to the 2000+ tons / day of excess inventory already going into inventories.

A recovering housing market has been the hope of copper bulls as well, but as you will note from my numerous housing posts I do not think new home construction will come roaring back in America any time soon.  I suggest you go to Calculatedriskblog for the full details on American housing.

I don't have any short positions on copper or copper miners as the momentum upwards is just too strong and it fits with the worlwide reflation theme.  When this theme ends I fear copper prices could revert lower if inventories keep rising.

Monday, October 26, 2009

Currency and stock market gyrations

For those of you who happen to follow the markets every day, the last few sessions have been extremely odd.  I have some non equity concurrent indicators I follow and they suddenly stopped working about 3 sessions ago.  I don't day trade so I haven't been whipsawed in my personal or clients' accounts, but the action in the market has taken on a different tone in the last few days. 

Today the market was up nearly 1+% and then down nearly 1+% within an hour and in the currency markets the dollar is stronger against most major currencies.  Here's some pretty pictures to show what I mean.  For the Canadian dollar and Yen, up is a stronger dollar.  For the Euro and Australian Dollar, down is a stronger dollar.  (Look at the fraction symbol and you'll figure it out)

These are all hourly charts from freestockcharts.com

Australian dollar is has punched through all 3 moving averages: The 20, 50, and 200


Canadian dollar has been in an downtrend for a few days.


Euro getting whacked today?  It also just moved through the 200 hour moving average.


Like the Canadian dollar, the Yen has been weakening for several days.


These are only hourly charts but it does show 'something happening' and a possible change in direction for the dollar.  Will the dollar actually change direction or is this all one big head fake to sucker in the dollar bulls? 
Don't know but get out your popcorn and watch the show.