Dollar Set to Fall Against Commodity Currencies

Simit Patel · 04-14-2009, 05:01 PM

All may seem calm to the casual observer, and there may even be indications of a recovery: the Dow and S&P have outperformed Treasury bonds and precious metals, and the dollar has remained stable. Is this the beginning of a new bull market? Is it time for permabears to pack it up and go home? The chart below illustrates the situation.

To my fellow permabears: fear not, for contrary to what the always happy-go-lucky bulls may think, this is simply a rally within a bear market. Short-term traders may find it enjoyable, but the buy and holders? Well, now remains a good time to continue accruing precious metals.

But for traders like myself who are always looking for opportunities to trade their long-term perspective, know that the market is currently giving us a very good opportunity. Inflationists/Dollar bears have been eyeing commodities, and on the Australian dollar and the Canadian dollar -- currencies closely correlated with commodities.

Check the chart below on the Australian dollar.

And the chart below on the Canadian dollar.

Trading This Setup

I've already entered a short USDCAD trade, and will be scaling into this position as it moves in my favor. I would like to see a test of the 1.05 area. I'll add on the break below each key level, and will close out if there are signs the trend has reversed or is stagnating.

Disclosure: Short USDCAD.

Products and services I use to trade profitably.

Jerry · 04-14-2009, 05:36 PM

Excellent thinking Simit.... I jumped in the U/cad trade..doing well....I too agree with you re: the premature "Everything is Great" people.... the charts tell all...but somehow..when YOU point it out...confirms my thinking.....Thanks...Jerry

Simit Patel · 04-14-2009, 07:53 PM

hey jerry,

glad you found the article to be useful....i think usdcad is a really great opportunity, the chart pattern on the dailies looks very nice in my opinion.

mattman · 04-14-2009, 11:47 PM

agreed.. The long term outlook for commodities is looking good. Both the Aud and the Cad look like good long term trades to me.

04-14-2009, 05:01 PM	#1 (permalink)
Simit Patel InformedTrades Founder Badges About Assets Badges Showcase Total Awards: 4 Join Date: Mar 2008 Posts: 1,457 InformedPoints: 30,492.41 Funds	Dollar Set to Fall Against Commodity Currencies All may seem calm to the casual observer, and there may even be indications of a recovery: the Dow and S&P have outperformed Treasury bonds and precious metals, and the dollar has remained stable. Is this the beginning of a new bull market? Is it time for permabears to pack it up and go home? The chart below illustrates the situation. To my fellow permabears: fear not, for contrary to what the always happy-go-lucky bulls may think, this is simply a rally within a bear market. Short-term traders may find it enjoyable, but the buy and holders? Well, now remains a good time to continue accruing precious metals. But for traders like myself who are always looking for opportunities to trade their long-term perspective, know that the market is currently giving us a very good opportunity. Inflationists/Dollar bears have been eyeing commodities, and on the Australian dollar and the Canadian dollar -- currencies closely correlated with commodities. Check the chart below on the Australian dollar. And the chart below on the Canadian dollar. Trading This Setup I've already entered a short USDCAD trade, and will be scaling into this position as it moves in my favor. I would like to see a test of the 1.05 area. I'll add on the break below each key level, and will close out if there are signs the trend has reversed or is stagnating. Disclosure: Short USDCAD. *Products and services I use to trade profitably.* __________________ My Links: Proud to be a Permabear, Crisis Investing Video Series, Investing in a Centrally Planned Economy, The Investor 2.0 Quest Last edited by Simit Patel; 04-14-2009 at 05:12 PM.

04-14-2009, 05:36 PM	#2 (permalink)
Jerry Badges About Assets Join Date: May 2008 Location: Miami Florida USA Posts: 482 InformedPoints: 249.69	commodity currencies Excellent thinking Simit.... I jumped in the U/cad trade..doing well....I too agree with you re: the premature "Everything is Great" people.... the charts tell all...but somehow..when YOU point it out...confirms my thinking.....Thanks...Jerry

04-14-2009, 07:53 PM	#3 (permalink)
Simit Patel InformedTrades Founder Badges About Assets Badges Showcase Total Awards: 4 Join Date: Mar 2008 Posts: 1,457 InformedPoints: 30,492.41 Funds	hey jerry, glad you found the article to be useful....i think usdcad is a really great opportunity, the chart pattern on the dailies looks very nice in my opinion. __________________ My Links: Proud to be a Permabear, Crisis Investing Video Series, Investing in a Centrally Planned Economy, The Investor 2.0 Quest

Thread Tools	Search this Thread
Show Printable Version Email this Page	Search this Thread: Advanced Site Search
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode

04-14-2009, 11:47 PM	#4 (permalink)
mattman Badges About Assets Join Date: Nov 2008 Location: South Korea Posts: 206 InformedPoints: 0	agreed.. The long term outlook for commodities is looking good. Both the Aud and the Cad look like good long term trades to me.