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The U.S. Dollar Just Peaked

By Dr. Steve Sjuggerud
Thursday, October 16, 2014

Yesterday, risky assets tanked... and "safe haven" assets soared...
 
But one traditional safe-haven asset didn't follow the script – the U.S. dollar.
 
As investors fled Italian bonds, Greek bonds, and Japanese stocks, they poured money into U.S. government bonds as a safe-haven play.
 
A huge amount of dollars was needed yesterday to buy all those bonds. In a single day, the interest rate on 10-year government bonds fell from about 2.2% down below 2.0% (before settling at 2.1%). That might not sound like much, but it is a massive move.
 
So you would think the U.S. dollar would have gone up.
 
It didn't.
 
What that tells me is that everyone who wants to own a U.S. dollar already owns it...
 
This fits with the numbers from my friend Jason Goepfert of www.SentimenTrader.com. Jason's sentiment data shows that the U.S. dollar is more loved than it ever has been.
 
It can't go higher, because there's nobody out there left to fall in love with it. So it can only go down.
 
After doing nothing for a while, the U.S. dollar started taking off in July.
 
And it's been a one-way ride to the start of October... Take a look:
 
 
That smooth one-way ride created the dollar love-fest. It lulled traders to sleep. It was practically Groundhog Day, as currency traders woke up each morning to the same thing – a higher dollar.
 
Those days are now over.
 
The U.S. dollar just peaked.
 
Trade accordingly...
 
Good investing,
 
Steve




Further Reading:

If you're looking for a good way to short the dollar today, the greatest financial mind of our time thinks one investment is a "no-brainer"... Get Steve's full report here.
 
"The Federal Reserve should raise interest rates next year," Steve says. "But no, that does not mean that the housing market is doomed. In fact, the opposite is true, based on history..." See the proof here.

Market Notes


HOW BAD IS THE OIL-STOCK DECLINE? VERY BAD

Over the past month or so, oil stocks have suffered a big selloff. To get an idea of how bad the suffering is, we need to look at a chart of Continental Resources (CLR).
 
Continental Resources is one of America's fastest-growing oil companies. It's a "fracking" leader in North Dakota's prolific Bakken Shale. Continental has used its fracking expertise to more than quadruple revenue over the past four years. When experts talk about growing oil companies, Continental is sure to be mentioned.
 
Since the start of September, the price of crude oil has fallen from $94 per barrel to $82 per barrel. That's a decline of 12.5%. But the market dumped oil producers at a larger rate.
 
Since September, Continental has fallen from $80 per share to just less than $53 per share... a decline of 33%. When a leading company loses a third of its market value in about a month, you know the sector is suffering.
 

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