Thursday, January 12, 2012

Dollar gut check…

Right now…the pattern in the dollar ideally requires a new high to finish the first major rally off the lows of 2011. Hence, I am expecting the resistance in the charts below to be broken to the upside and continuation that could be rather powerful before the cycle pattern is complete for the dollar. 

As another element to the already aberrant markets, short interest and bearishness are a extremely low levels and additionally to that, people are now dismissing recent dollar strength and EURO weakness related to equities as a permanent decoupling. The reality is the above observations serve one main function - complacency. There have been several times in the last few years where people also were permanently glued to the “Buy the F**in Dip” or other some such assumption as if it was not mantra and a foregone conclusion. In all cases, the complacency has not been rewarded.
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