The December Dollar Index is down 26.5 ticks at 76.025 this morning as I write. The enclosed chart shows that the downtrend continues for the dollar. Just as a reminder in case you forgot, the lows for the dollar were seen back in March 2008 at 70.698. So the dollar could drop another 530 ticks just to get down to last year’s lows. I believe that is a likely scenario. It is interesting that the “talking heads” say that the US will be in dire straits if the dollar falls from here, and yet just last year, the dollar was more than 500 ticks lower. The directional movement indicators are still bearish. With a total lack of liquidity in the dollar index options, I will remain flat in the dollar.

Oct. 13, 2009
David Hall