I’d Buy The USD If This Happens…

  • August 3, 2005
  • Jes Black

Morning Market
Comment: August 3, 2005

 


USDX: 88.15 


S&P Futures: 1,244


Gold: 433.5

 

 


FX:  Yesterday we felt nervous
about the dollar breakout path as the USDX index did not act as a “wave E”
should in a larger “ABCDE” pattern. A move to 87.00 now seems most likely. If
this were to happen quickly we’d consider buying USD again at the 87.00 level
for a final stab at the 92.00 level in August.

 

 

 

 

 


Stocks:  No change: We bought the
VIX last week for an averaged rate in the spot index at 10.50. The S&P 500 is
testing the key 1245 target we had mentioned back in October and with numerous
momentum and sentiment divergences with these new highs, we continue to favor
the topping scenario as oposed to the mainstream that sees a goldilocks economy.

 


Bonds: No change: Bond yields rose
above 4.3% today but only a move above 4.6% in the 10-year yield would indicate
bonds are headed lower.

 

Regards,

 

Jes Black

 

Jes
Black is the fund manager at Black Flag Capital Partners and Chairman of
the firm’s Investment Committee, which oversees research, investment and
trading strategies. You can find out more about Jes at
BlackFlagForex.com.

Prior
to organizing the hedge fund he was hired by MG Financial Group to help
run their flagship news and analysis department,
Forexnews.com. After four
years as a senior currency strategist he went on to found
FxMoneyTrends.com – a research firm catering to professional traders.

 

Jes
Black’s opinions are often featured in the Wall Street Journal, Barrons,
Financial Times and Reuters. He has also written numerous strategy pieces
for Futures magazine and regularly attends industry conferences to speak
about the currency markets.