Friday May 5, 2006 - 10:40:40 GMT
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Black Swan Capital - www.blackswantrading.com
Strong report weak dollar?
"Markets can remain irrational longer than you can remain solvent.â€ť
John Maynard Keynes
FX Trading â€“ Questions this morning
So, whatâ€™s going to happen to the dollar today?
Thatâ€™s an easy one. Based on the pattern established, hereâ€™s how itâ€™s going to work: We will get a blow-out strong US jobs number todayâ€”well above expectations. The dollar will rally for about 2-minutes, then it will rollover and move lower for the rest of the day.
Hereâ€™s another questionâ€¦
At what point do central banks matter? Why do we ask? Itâ€™s the metals of course. Liquidity still abounds according to price action as you can see in the weekly chart below:
Hereâ€™s the last question that we have no â€śgoodâ€ť answer for:
If the US geopolitical situation is so awful (a plausible reason for $ concern), why does the stock market keep heading north? The US stock market and the dollar tended to move together â€śbefore,â€ť now they appear to divergeâ€¦
This line of questioning could go on for pages. The point is: There are so many questions and so few good answers without the gift of hindsight. Except of course for our answer on near-term dollar price action todayâ€”weâ€™ve got that one nailed! Donâ€™t we?
Jack Crooks, Black Swan Capital
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