Safe, Perfectly Safe

  • October 9, 2001
  • Marc Dupee

That was the thinking before the weekend raids. But
the United Kingdom’s active participation in the attacks on Afghanistan is
causing something of a flight out of British pounds, sending it on its
biggest tumble in a month. Pounds sterling had been something of a
safe haven buy following the attacks. But British special forces are
reported to be working closely with US special forces and this is seen as
making the UK more of a target. 

Also, comments made by an European Union financial
official is modifying perceptions about the strength of the euro vis-à-vis
the dollar. Too weak of a dollar would make economic recovery in the US more
difficult, which in turn, would slow global economic recovery. 

Look at the recent highs in the December British pound
(
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PowerRating).
You will notice that it left a pattern similar to a Turtle Soup Plus One
Sell. 

The potential for inflation remains a problem for a
continuation of the rally in bonds. Elliotticians can also make the argument
that bonds have completed a five-wave pattern. 

T-bonds
(
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PowerRating) are down 20 ticks at 106 5/32.