Thursday, November 4, 2010

US Dollar

Follow Me on Facebook Follow Me on Tweeter
I was very interesting day today. The indexes have broken the side-way and uncertain trading trading by strong opening. The indexes not just broke - they "hold the ground". Even the Nasdaq 100 did not moved higher after the morning's swing, the DJI, S&P 500, Russell 2000 and other indexes were in positive move the today's entire session.

Today's advance has been supported by strong bullish volume on all indexes. As a rule strong bullish volume could be noted at the begging of a new up-trend or at the end of the up-trend. I would not try to guess right now what is possibly today's volume could mean. However, if we do not an equally strong decline tomorrow, I would say, that the odds of bullish market would be higher.

On the other hand it looks like the current up-move was strongly based on the decline in dollar. The other interesting thing is that today we had record high volume on the US Dollar index during its decline. We had similar volume behavior in US Dollar index in period from October 2009 until December 2009. If the US Dollar continues to slide down for another month we may see positive trading on the stock market during that period of time.

Over the past month we had strong advertising pressure that the US Dollar should be artificially weakened and that would greatly help the US economy. It seems like yesterday's FED announcement to print another trillion and pump it in the economy has pushed many investors (who was sitting on the money) into panic. Even the money are not printed yet and are not injected into the system the fear of inflation could push those investors who has a lot of cash to buy stocks. Respectfully, this may may the stock market on positive sentiment.

P.S. At least the Government will sell GM stock on rising trend an at the top.

No comments: