Why We’re Watching The Dollar

I had this nice, neat
report to put out to you today
…but as I write this, the futures
are getting whacked on the heels of a plummeting dollar. Can the market change
its stripes in one day? My answer is, “We shall see.” Instead of predicting,
let’s just react.

A few notes

I have mentioned the weak DOLLAR
to you on several occasions in past months. Simply put, it is acting as well
as Dick Grasso’s career. A plunging dollar can only be a negative for the
markets in the long run. This needs to be watched closely. It is a sign of
long-term confidence in our currency. Right now, there is a complete lack of

GOLD has broken out.
So far, the market has ignored the implications of higher GOLD prices. I don’t
know how long that can last.

BONDS have been
bouncing but as I have told you, I believe the longer-term lows in rates
occurred in June. If the dollar continues to sink, you can write it in stone
that rates will be higher to compensate for the weak dollar.

As you know, the internals of the market have been
acting just fine. In fact, many FINANCIAL stocks
recently broke out of trading ranges to go along with the S&P 500 breakout
above 1015. It will be key for the S&P 500 to hold that level for this market
to stay in good shape. Should be a fun Monday. Hopefully, the market will
put in one of its patented reversal days. I will be back tomorrow with the

Gary Kaltbaum