This week saw the first ECB rate hike since 2008, with a 25bps rise. Gold at a new high of $1475, Silver hitting $40 an ounce, EUR/USD 14460, GBP/USD 16381.
NOTE the red candle with the dollar breaking 75. I dont know much, but I know that this is BEARISH, and I would be looking fo rthe dolalr to go down at least another 2-3% this week alone, and look for a retest of 70 on the index by June.
There has been speculation over whether, with improving US economic indicators, QE2 would be wound up earlier before June. I would contend that it is unlikely. And even if it were, would only provide a momentary bounce to the dollar.
While the dynamic remains sell dollar, buy dow, this will hold til the Fed begins rate increases I think.
With Q1 earnings set to come out, this will likely be the next up move for the Dow.
Market moves affect external reality, whether this move is true, or a false premise, seems this commodities bull market is set to march on.
Quotes:
Dow 12378
FTSE 6036
EUR/USD 14458
GBP/USD 16378
Crude 113
USD/JPY 8488
US 2yr 0.75
US 10 Yr 3.625
US Dollar index 74.85
Trades:
1)With Q1 earnings on the horizon, I think it is again more liekly fo rhte dow to outperform the ftse (which has seen significant resistance around 6000).
Long the Dow at 12378, Stop 12000, Target 13000
2)Short the Dollar Index at 74.85, stop at 76, Target 73
