The December Dollar Index is up 12.5 ticks at 76.19 this morning as I write. The enclosed chart shows that the long term trend of the dollar is still down. After only about a 2 1/2 % correction off the lows, the dollar dropped sharply yesterday quickly giving up half of the gains since those lows. The high prices this week hit right into the declining 40 day exponential moving average before breaking yesterday. So, is the dollar ready to resume the downtrend or is this a pullback before another rally attempt occurs? The directional movement indicators are right on top of each other, so I am not getting any clues there. As a matter of fact, the indicators suggest that the dollar may be entering into a period of sideways choppy action for a while, all in the context of a long term major down trend. I recommend standing aside in the dollar for now.

Oct. 30, 2009
David Hall