I was surprised when our dollar sentiment survey revealed that only 56% of readers were bearish on the dollar. After seeing bearish readings north of 90% in some places, and anecdotal evidence to support these #'s, I was a bit surprised that our results weren't as extreme.
Though astute reader MarketAddict pointed out that perhaps our readers are a bit more contrarian in nature, and thus the balanced opinion in our house poll.
Today in Growth Stock Wire, expert trader Jeff Clark sounded a Bubble Alert in everything except the dollar.
From a contrarian point of view, a bottom in the dollar is near. Too many people are betting on its demise. And while they may eventually be proven correct, the market is likely to make them suffer in the short term.
I agree wholeheartedly with Jeff, and believe that we could be in for a powerful, sustained dollar rally coming up. So if you're glancing longingly at gold, oil, stocks, and other "dollar hedges" - this is probably a wise time to check our emotions and channel your inner contrarian.
Ed. note: I'll make a quick plug for Jeff's premium trading service, The Short Report. It's excellent - I've been a subscriber for several months now - worth checking out if you're a serious short term trader.
It's not hard to be bearish on the dollar when you see this chart.
(Source: Barchart.com)
2 comments:
Hi Brett,
Thanks for the pub. It is much appreciated.
I'm currently building a short EUR/JPY position. I would rather play Euro weakness than dollar strength.
$75 billion in treasuries are going to be auctioned next week. We'll see how it goes. I'm not optimistic that those auctions will be well received. More pain for the dollar may lie ahead.
Sure you bet - I also have no idea who is going to buy this crap.
Though dollar is extremely oversold, so a short-term bounce could be fast and furious.
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