The Weak Dollar Gives...

The Strong Dollar Takes Away

by Chris Ciovacco, Ciovacco Capital Management, LLC. | June 4, 2009

Comments as of Wednesday's close: Risk assets have been benefiting from a weakening U.S. dollar. On Wednesday, the dollar strengthened on concerns about the economy (acting as a safe haven). From a technical perspective the dollar index has some support near 79.05 and 78.98 (today’s low was 78.33 – we are at 79.53 now). Last time these areas came into play, a three week countertrend rally followed, which is one reason we have been taking relatively small positions in recent weeks. A multi-week dollar counter-trend move is a possibility - we just need to be aware of it.

Bullish GAPs Still In Play - Support On S&P 500 Holds

06/03/2009: On May 8, 2009, we presented this chart of crude oil (see below). Oil was trading at $58 when we posted the chart. The gap was filled as oil recently traded over $68. Today, similar chart patterns are present in many asset classes. We will illustrate the current situation using SLX (steel stocks).

U.S. Dollar Independent Money Manager Atlanta, GA

Chris Ciovacco is the Chief Investment Officer for Ciovacco Capital Management, LLC. More on the web at www.ciovaccocapital.com

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Chris Ciovacco CIO for Ciovacco Capital Management, LLC | Atlanta, GA USA | Email | Website