{"id":3942,"date":"2011-02-01T21:37:29","date_gmt":"2011-02-02T02:37:29","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=3942"},"modified":"2011-02-01T21:38:34","modified_gmt":"2011-02-02T02:38:34","slug":"dollar-critical-support","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2011\/02\/01\/dollar-critical-support\/","title":{"rendered":"Dollar Headed for Critical Support Again"},"content":{"rendered":"

I did not think the dollar would test the critical multi-year support line this soon<\/a>. I thought the prospects for an economic recovery that is looking stronger than in competing developed economies would be sufficient to give the dollar a helping hand up despite the Federal Reserve’s best attempts to keep grinding the currency into powder.<\/p>\n


\n
\"Dollar<\/a>
Dollar sinks to fresh 2-month lows as it nears critical multi-year support<\/figcaption><\/figure>
\n<\/center>
\n<\/p>\n

Not even the crisis and chaos in Egypt<\/a> could stop the dollar’s most recent descent for longer than a day (not visible in the weekly chart above). For a trade, I am currently assuming the dollar will bounce from this support once again, and I am effectively long the dollar index; I even sold my trading<\/strong> position long the Australian dollar against the U.S. dollar (as always, I am clinging to my core FXA position). However, if this support breaks, I will likely be forced to accelerate the rebuilding of my gold and silver holdings<\/a> far ahead of schedule by scaling into the commodity ETFs GLD and SLV.<\/p>\n

I do not think the ever-growing cacophony of gold (and silver) skeptics have quite prepared themselves for a fresh bout of extended and protracted weakness in the U.S. dollar, and it will be interesting to see how those positions twist in the wind under such a scenario – assuming it also boosts gold and silver. I am particularly enjoying Doug Kass’s near crusade against gold<\/a> as he bets gold will go into freefall all the way to $1050 or so. His latest move was to short more gold after it finally popped in response to the outbreak of violence in Egypt<\/a>.<\/p>\n

Speaking of Egypt, I think the market’s two-day buying frenzy in the EGPT ETF tells us that almost “no one” is worrying about bad outcomes there anymore…<\/p>\n


\n\"Buyers<\/a>
\n*All charts created using TeleChart:<\/strong> <\/a>
\n<\/center>
\n<\/p>\n

Be careful out there!<\/p>\n

Long: GG, PAAS, FXA, net long the dollar<\/p>\n","protected":false},"excerpt":{"rendered":"

I did not think the dollar would test the critical multi-year support line this soon. I thought the prospects for an economic recovery that is looking stronger than in competing developed economies would be sufficient to give the dollar a helping hand up despite the Federal Reserve’s best attempts to keep grinding the currency into … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[199,62,21],"tags":[299,471,200,24,473,431,472,474,25,354,284,1597],"class_list":["post-3942","post","type-post","status-publish","format-standard","hentry","category-commodities","category-technical-analysis","category-u-s-dollar","tag-dxy0","tag-gg","tag-gld","tag-gold","tag-goldcorp-inc","tag-ishares-silver-trust-etf","tag-paas","tag-pan-american-silver-corp","tag-silver","tag-slv","tag-spdr-gold-shares","tag-technical-analysis"],"yoast_head":"\nDollar Headed for Critical Support Again - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2011\/02\/01\/dollar-critical-support\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dollar Headed for Critical Support Again - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"I did not think the dollar would test the critical multi-year support line this soon. 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