Dollar Commentary

Our leaders’ answer to all economic problems is printing and lending more money. Is that a solution, or a denial that there even is a problem?

Our own fed promises a dollar-destroying low interest rate, for another two years. Overspending governments are not interested in a strong currency. They want your currency and purchasing power to be as weak as possible.

Technically, the counter trend rally that the dollar is enjoying looks to be headed into mid-October. The move looks to be an oversold bounce and nothing more. A byproduct of the strengthening dollar is a stock market that is in great danger.

My technical work continues to point to new lows for the stock market with a mid-October timeline, and that fits with my dollar bear rally timeline.

Stock Market Destruction Chart

The stock market has pretty much given me what I had expected. On June 24th I issued the headline, “Gold Stocks Bottom While SP500 Tops Out.” I targeted the 11,700 area for the Dow, and that target was acquired in early September, and the rollover I projected from there occurred on schedule. What is the next move now?

As the dollar finishes its bounce, it’s likely to continue to tear up the stock market. The stock market has a queasy feeling to it between now and the middle of October. I see new lows coming to the stock market, likely towards the 9500 area, or even a tad lower. The target of my highlighted head and shoulders formation would put the market in that general area.

The numbers I’m talking about for the Dow cannot help but scare investors who remember the destruction of 2008. With real terror, so comes your greatest opportunity. I’m watching my internal sentiment indicators for the stock market very closely, to identify the area of greatest opportunity for you.

A key indicator of the health of the economy is the copper trade. Copper is called “Dr. Copper” for good reason. Copper is said to be the metal with a Ph.D. in economics, for its ability to determine the health of the future of the global economy.

Dr. Copper turned lower in 2008 as the credit crisis was just getting started. Then it started moving higher in the last days of 2008, three months before things turned around for the stock market. That is just one example of many cases where copper has lead the economy and the stock market.

I’m not referring to copper as a commodity to sell or short, but rather as a barometer that measures the health of the economy. What copper is saying about the economy and the health of the stock market right now it is quite troubling, and it is in full agreement with my mid- October stock market target analysis.

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