Sunday, June 28, 2009

Dollar Index

DX Daily Chart

Rising wedge broken in the DX chart. Commodities should surge. How will US stocks perform? Assuming that foreign investor pullout their funds due to depreciating USD, US assets should drop. But the surge of commodities should pull up commodities related stocks (i.e. miners, oil & gas service provider etc) if US citizens buy due to the perception of inflation (to protect their wealth)

You must also remember, even though the general population jobless rate is approaching 10%, those with money (a very limited number) may have the power to bid up the asset price because they have a lot of money to spare (see the inequality of wealth distribution for US). On the other hand, the rich people may decide to invest in the BRIC countries to take advantage of the strenthening of foreign currencies.

Ah, very confusing arguments. So, look into the charts for the clues on where will the market go.

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