Here’s The Most Important Level In The U.S. Dollar

  • August 8, 2005
  • Jes Black


FX: As we indicated last week and
in this weekend’s report we see the dollar falling to channel support 87 where
we will take a stab at the long side with tight stops. This should take the euro
to our target of 1.25/26 where we would consider shorting it. Until then the
trend remains down for the dollar. Moreover, our hope for a final rally is
mainly due to our seasonal studies that suggest the dollar must reverse this
week for a final assault on 92 before heading lower the rest of the year.

 

 

 

 


Stocks:  Last week we said, “The
market is very VERY close to a key top. We bought the VIX two times last month
for an averaged rate in the spot market of 10.50. This means we may again have
an opportunity to get short the S&P 500 in the coming days to weeks.” We feel
the stock market topped last week and traders have a good risk/reward setup to
get short with risk limited to just above the 1245 highs.

 


Bonds: Bond yields rose above 4.3%
but only a move above 4.6% in the 10-year yield would indicate bonds are headed
lower. Meanwhile the 5-year note is getting pounded by the speculators.

 

Regards,

 

Jes Black

 

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