The US dollar index

That is the title of my post today – the ALL important US dollar index. If you have positions, you will need to monitor the US dollar index.

I had been waiting for the US dollar index to reach 79. The low today is 78.33 thereabouts, while the high is 79.38. It is just a nose away from the psychological resistance of 80. The last time it breached 80, the US dollar index closed below 80 for the week and reversed to 74.9 thereabouts closing down 14 days out of 22 days.

Why am I so excited with the US dollar index? I feel that when it reaches 80, the whole drama is about to settle down or that the outcome on the whole European crisis is about to be revealed – in other words, I am speculating that this down trend is about to reveal the next move.

(Forget about Gold and all the Gold experts’ talk of it being a safe haven. Isn’t it awkward that the coast is so quiet with even all the sovereign debt crisis and that Gold fell more than US$ 100 since testing the US$ 1,800 level? Where is all the safe haven talk and Central Bank buying of gold? If you don’t understand Gold and its mysterious characteristics, I have one word for you – beware!

Trust me! When Gold rises in the next week or so, all the talk about safe haven, volatility will come back. Gold buggers would have forgotten that amidst the debt crisis in Europe and clashes in Egypt, Gold fell.)

Imo, the European leaders are intelligent, not stupid. Like their US counterpart, the emphasis is so concentrated on politics, image, treaties, rules, etc. Rules and laws are made to be amended such that there WILL be progress.

Are they blind? Are they deaf? I do not think they are. It is just that their role in this global drama have not been called for. 3 of 5 leaders had toppled over a span of a month. It is part of a whole drama, etc.

EU summit, G20 and their role – what else? A meeting of leaders leaving clowns to amuse the financial world. What is the outcome? A joke I would say. Are they spending taxpayers’ money to watch a bunch of clowns testing their leadership? I don’t think so. How would you compare 'ex PM Greece referendum affecting financial markets' and 'Europe sovereign crisis affecting financial markets' - just the same thing but slightly on a bigger scale.

When there is a problem, there is always an opportunity. As the Chinese saying goes ‘problems are never too big, if it is, it is not a problem’.

Since October 28^th, the S&P, the Aussie, the Euro and most high yield assets are on a down trend. Interestingly, energy/crude oil rose, as a result of supply rather than demand. The primary beneficiary is none other than the US dollar and of course, the US dollar index.

The reason being it is still the global safe haven despite all the US debt talk, US credit rating being downgraded, supercommittee and the fear of another US credit rating downgrade by S&P, Moody and Fitch. What a load of !@#$%^&*!

I am just another clown waiting for the next scene on how the US dollar index is about to play in this very interesting drama. Watch the US dollar index reveal the next move in financial markets!