I’m not a currency expert, but it would seem that the dollar is getting over bought here.

I would imagine the dollar is strong due to the short term commodity correction. Also the PPT may be dumping gold on the open market which is positive for the dollar as you know.

This is a nice break of the 200 day, but you tell me is this debacle over yet? I do not think so.

If oil can edge higher in the face of more dollar strength I would not expect the dollar to do much. While it appears the dollar has found a short term bottom over the past 5 months there is no real reason for the dollar to rally.

The fundamentals that created the run in the first place are still good son! You can take that to the bank….that is if there are any left. LOL tomorrow is Demolition Friday.

Short term the dollar could challenge $75.70 which was the high of a big sell off day on 2/28/08. A break of this price on a closing basis would signal a trigger and a trade higher to fill the gap of $79.13 from 9/27/07.

Beyond that you would have to be smoking crack if you thought the dollar would trade higher. I’m sure if you smoked more crack then you could envision our liquidity crunch coming to and end abruptly.

Rather than shorting the dollar, since I’m a glass half full type,  I would rather buy GLD since it is oversold at this point. Wood said recently not to think, but to buy….I feel that premise is right… here and now.

If GLD were to sell off further, I would supplement  @ $79 -$82.50 which is just at or below the 50 day…beyond that GLD is broken and one would have to wait long term to get ones money back…

With ARM ALT~A loans resetting, auction rate security buy backs, subpoenas flying around, and the usual suspect problems I think this is a great time to take down some GLD if you can’t take down physical gold.

Remember, this is not  going to be your fathers recession!

by GW