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Old 12-14-2011, 06:11 AM   #1
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Dollar gaining strength - how long before Fed intervention?

The dollar index broke through 80. The Euro fell below 1.30. How long before the Fed intervenes? A stronger dollar is going to hurt the export economy and prospects for some growth, so I expect they will act at some point to weaken the dollar.
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Old 12-14-2011, 07:10 AM   #2
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However long it takes him to gas up the helicopters.

Between the Euro collapsing, possible US QE, Fed bailout of Europe, and war with Iran and/or oil disruption the timing of all these events and their impacts to the price of metals is going to be an intense exercise in threading the needle. We may only have minutes to hit bottom and then watch the metal fly. Better stay close to an internet connection and have the coin shops on speed dial.
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Old 12-14-2011, 07:19 AM   #3
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Consensus seems to be Feb-April..
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Old 12-14-2011, 07:29 AM   #4
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If the dollar keeps rallying at this pace, I don't see the Fed waiting until Feb-April.
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Old 12-14-2011, 07:51 AM   #5
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Originally Posted by PMBug View Post:
If the dollar keeps rallying at this pace, I don't see the Fed waiting until Feb-April.
Other than golds and financials.. the market isn't really all that bad. At least not the indexes. It might take more of a drumming to get intervention.
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Old 12-14-2011, 07:54 AM   #6
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I believe the relative strength/weakness of the dollar in the FX markets (and consequent impact on the import/export economy) will be the primary consideration, not how the market is reacting.
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Old 12-14-2011, 08:05 AM   #7
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Something weird is going on here, because with silver down well over a buck, and the dollar catapulting, it looks like some serious deleveraging is going on. The banks all deny any problems and swear their balance sheets are rock solid, but this feels like risk off to me. What say the crowd on this?
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Old 12-14-2011, 08:24 AM   #8
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Now down a buck seventy!?!?! Yeah.....something is up here. I wonder what the Brotherhood of Darkness is up to now?
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Old 12-14-2011, 08:32 AM   #9
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I agree, the FED won´t watch the $ strength for long. This is devastating for US exporters. It´s actually good for Eurozone exporters.
China won´t be happy about it aswell. Their Yuan/dollar peg will hurt their exports to the Eurozone.

A great trade will be shorting USD/CHF, because I don´t expect that the SNB will hold the EUR forever. Finally, they´ll have to let EUR/CHF below 1.20.
USD/CHF is at nearly 0.95 up from 0.7 in august. I have placed a buy order for shorts at USD/CHF 0.9

Silver´s long term support at 30 was broken. Plus oil fell off a cliff.
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Old 12-14-2011, 08:35 AM   #10
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As a guy currently picking up pennies in front of this steamroller, I'm reminded of my rear view mirror text "Warning, objects in mirror are closer than they appear".
Short Euro, Gold (yeah, sorry), FXI (china), and raw materials at the moment.
All on a hair trigger to close the trades, but very nicely green right this instant.

Over the last few months, it been more like short the pops, cover the drops, not buy the dips and sell the rips - on almost everything. More work doing that - the timing is harder, but it's what my logs show is making the most money.


This almost has a flavor of "lets see what happens if we convince everyone we're not going to print". That of course does not mean they won't -- just testing the waters.
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Old 12-14-2011, 08:52 AM   #11
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People are buying the dips in gold.
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Old 12-14-2011, 09:01 AM   #12
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"This almost has a flavor of "lets see what happens if we convince everyone we're not going to print". That of course does not mean they won't -- just testing the waters. "

I think you're on to something DC. The Fed knows they cannot let this puppy flounder too long, because it reinforces itself after a fashion, and that makes rescue twice as hard. Kind of like the Greek problem. If they had simply allowed them to default two years ago, we might not have ended up in the mess we're currently in.
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Old 12-14-2011, 09:05 AM   #13
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Politically speaking, the FED needs a full blown panic to calm down it´s critics. If stocks falll down quite a bit (let´s say SP 500 < 1000), everybody will be screaming fro help in DC.
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Old 12-14-2011, 09:07 AM   #14
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Sure, but I can't make myself call it a dip till it turns back up for at least a day (no matter what I'm trading). Hasn't happened in the last 5 days, so it's not yet a dip - it's a downturn, until it turns back up.

EG, buying now is catching a falling knife. Use kevlar gloves if you must do that.

You can nearly always afford to miss that first little bit of "up" after a downturn, and safely catch the middle of the move, if you're an active trader who watches all day as I do. Better risk/reward ratio that way. I use pretty tight stops at first doing that, in case that turn back up is a head-fake bounce - having learned very expensively during the crash about that one.

Patience is just as important in opening as in closing trades. The right amount is "magic".
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Old 12-14-2011, 09:12 AM   #15
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I´m not buying, just watching the ticker and everytime we come close to gold $ 1600 somebody buys.
Gold is now below the 200 dma (1614). It hasn´t been there since early 2009.
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Old 12-14-2011, 09:22 AM   #16
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Sure, there are always "bargain hunters" who jump in at whatever level they've defined. The big trick to trading is figuring out whether they can hold at a support, or will give up (or run out of money) and it turn right back down after the "dead cat bounce". Try losing about the price of a home on mis-calling that one, and like me, you get shy after that 3rd degree burn. (2008) I wasn't as quick then...

This is why I wait for a confirmed turn back up - I'll leave a little on the table to have better confidence it's a real turn back up that's going to stick.

Actual news of printing would do it for me, but I don't see that tll as you say, the Feds critics get a nice bashing. At the moment, it feels to me like they are glorying in NOT giving into the crack-whore banksters who assume the game will forever be rigged in their favor. This kind of panic and hysteria can be fun to watch if you're sitting in the right place.

There's some real volume on the paper gold (GLD, IAU) charts the last couple days, not vapor. Interesting. Perhaps they're trying to shake enough people out that they actually have enough gold (or at least closer) to match the paper ownership?

I don't have a clue - while the theory is interesting, right now I have to adopt another cliche - "the ticker is the truth", to survive. I have to make money right now to eat right now. No way I can afford to eat my seed corn for any length of time - gotta keep my trading stake pretty intact.
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Old 12-14-2011, 09:57 AM   #17
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Ok now 1600 is substantially broken. That´s not good at all.
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Old 12-14-2011, 10:08 AM   #18
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As you guys know, im a noob. I was intending on making my second purchase of silver within the next week, but after watching the ticker, and reading the comments here, is this not a good idea?
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Old 12-14-2011, 10:14 AM   #19
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Oppie, I would wait to see what happens. This looks pretty serious today, and if it goes in to tomorrow, there may be a better entry point. There are others here who know a hell of a lot more than me about the markets, so I would wait until some of them chime in.
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Old 12-14-2011, 10:15 AM   #20
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From my warped point of view (just ask anyone) you don't set a time so much as you set a set of conditions that trigger buying. As in, if it's still going down, wait for that to be over with, so you can afford more. Or think about averaging into a position if for some reason you're worried you'll spend the money otherwise and need to lock it up so you won't.

I'd wait and watch, myself. But everyone has to have their own plan that works with their own methods and psychology. If you're likely to just sell it at a loss if it keeps heading down, you shouldn't buy it now - in my opinion. If you know you're going to hold "forever" then...anytime is OK, but some times are better than others.

I'll report after I close my shorts, if that helps, but....I'm (very) not perfect either, and tend to close trades whenever the money is good enough, and very quickly when they look "too good to be true" which is about what my shorts look like right this instant. Gheesh, up ~30% in ten days on GLL? Too good to be true...but to not be totally heretical, that's a hedge against my longs. Probably about time to take the money and run on that one.

Frankly, this market has been so insane and hysterical, it's possible to open short and long trades at the same thing at the same time, and close them both green within days of one another...so rational analysis is kind of out the window just now - it's all surfing, not designing boats.
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