The Next Move Will Tell Us More

By Chip Hanlon | August 12, 2008 | 2:37 PM | 4 Comments

Alright, we all know what has happened over the last month: U.S. dollar up 6%, Euro down 7%, gold down 15%, oil down a whopping 22%!

And oh, yes, the Dow up 7+%.

I continue to believe global markets will react well to a stronger Greenback, but I don't believe much else at the moment. Put another way: sometimes no opinion is an opinion.

What do you do with the Euro now, short it? Oil, too? Come on... even if you think the U.S. dollar bear market and commodity bull markets have reversed, in the short-term piling into stocks or ETFs behind that belief system would be tough. If you're willing to wait, you'll learn a lot more and have easier choices on your hands, too.

First, there's no guarantee that the Dollar bear is dead. Financials are struggling today and I am convinced that deep problems in commercial real estate will be the headliners as we move deeper into the second half. In that or any related environment, couldn't we find ourselves back in a market concerned about the dollar/financials/The Fed in no time at all? Of course. We should expect that, in fact.

What the dollar and commodities do in that environment will tell you what to do next. If we get a small pullback in the dollar and weak rallies in commodities, move further out of commodities and into consumer-related names, out of some foreign currencies and into the USD, etc...I could go on, but you don't need it.

Why put a gun to your own head and trade this market right this second? Just hang tight, your next move will become a lot clearer soon. Don't sweat it if you feel you've missed these recent moves. They'll probably be at least corrected/re-tested soon... there's always another train leaving the station.

I wrote yesterday that it feels like the tide may well have turned on a lot of the decade's dominant trends, but there's no way to confidently draw that conclusion without some more action. Let it happen.

**USA Volleyball won again, by the way!  Good showing...they're now 2-0 and on top of their pool.  I wrote about my ties yesterday; expect more reports on this team here, that's all there is to it.

The Next Move Will Tell Us More... Think Saskatchewan,Newfoundland,Alberta & Next year Quebec...commodity service orgs/Canroy TrustsLQSIF.PK[LIQ.UN];Harvest Trust[HTE.UN];PDS[PD.UN] with takeover of Grey Wolf operates in USA & CAN & many others Onshore & Offshore USA,Gulf of Mexico service companies:BOLT;DWSN[DRQ;ACGY; seems to me they will be active for the next few years no matter the price of O & G.. What say you about this strategy now? Submitted by Lalo Palo Malo (not verified) on Wed, 2008/08/27 - 12:27pm » reply |

Video Chip who's that young guy with Slagle on the home page video section? Submitted by Jerry Slusiewicz on Wed, 2008/08/13 - 1:00am » reply |

Sky's blue!As I live in Sky's blue!  I know it sounds odd, but sometimes you should wait to see how things go. Put another way: it's often best not to commit chips to the pot. Submitted by Chip Hanlon on Tue, 2008/08/12 - 9:19pm » reply |

"Do nothing?" Wow, that's "Do nothing?" Wow, that's helpful. Let us know when the sky turns blue. Submitted by thanks for nothing (not verified) on Tue, 2008/08/12 - 9:14pm » reply |