Thursday, October 14, 2010
US Dollar: Drop, bounce & then target?
I believe Uncle Buck is going there eventually, but one wonders if we will see an interim bounce - perhaps leading into the next Fed meeting on November 2 & 3? We have the 3 amigos after all, Huey, Duey and Lewie playing bad cop at the Fed. Some believe that Bullard, Yellen and Koenig are right minded officials attempting to restore sanity to the policy debate. I believe they are part of a bureaucratic structure, hell bent on keeping a terminal system alive as long as possible, sent out with marching orders from the Ministry of Expectations Management.
The US Dollar is putting a lie to the magic show going on in the T Bond market and the herds must not be allowed to panic into assets - a slow, steady re-entry is preferable. But since when does the herd do anything slow and steady? The wizard meanwhile, believes he can massage the process with the jawbone arm of the Ministry. We will see.
There's some support for Uncle Buck and there's the ultimate target. Of particular note: weekly MACD stinks...