back to blog homepage

Charminization of the Dollar


Well, given the previous two posts, I thought we should at least look at the carnage in the dollar.

In the chart above, you have almost a mirror image of the chart at the end of the previous post, the one showing the S&P 500 in an uptrend. This chart shows the dollar in a strong downtrend, with the moving averages all falling and the shorter term ones falling faster than the longer term ones. This is a graphical image of a freefall.

And to add to the negative techincal picture for the dollar, the MACD indicator shows that there is more downside ahead as the black line just crossed the red line in a downward direction.

Could we bounce up? Sure, all moves make turns, but the downtrend is in place for now.

We are fast approaching the 71.50 level which I noted in a earlier post was a significant level – it was the low in 2008 prior to the flight to safety movement into the dollar during/after the subprime debacle. When we get to that level, then we will need to make an assessment of what is next. Until then, expect gold and oil to move higher.