Nearly, everyone is negative on the dollar and the market is currently pricing in the continuation of quantitative easing.
Why is the dollar’s direction important, you may ask? Well, when the dollar drops, the US stock markets tend to rise because when the dollar is stronger, it has greater purchasing power, so the market rises in dollar terms.
Take a look at what happened on August 23, 2011 as the market prepared for the results of the Fed meeting. The dollar fell over half a percent and the Dow, the S&P, and the NASDAQ surged 2.97%, 3.43%, and 4.29% respectively.
HOWEVER, what if 'most people' are wrong? Wouldn’t it be great to have a signal as to which way the market thinks the currencies will go? Fortunately for followers of ChartsandSignals.com, the dollar trend can be seen plainly.
We are seeing a possible early warning sign in our proprietary US Dollar chart, which could surprise a heck of a lot of people! Here's the snapshot of the dollar chart for this week (Jackson Hole -2 days and counting): http://www.chartsandsignals.com/ic-sig2.html
Every week, on our proprietary charts, we can see the dollar’s current action, and the likely future trend. You can get access for FREE here:
http://www.chartsandsignals.com/icc-newacc.cfm
