Thank the Media for Telling Us the Dollar is Falling

I found it interesting this week that there were some news stories relating to the demise of the US dollar and a pending dollar disaster. While they all seem logical, why are the stories coming out now? While the information in the articles may be news to you and me, is it really to the global currency market? Is it unknown to the FX market that other nations would like to diversify away from the dollar, etc? Is this the first "secret cabal" meeting that has taken place discussing such options? Surely not. If it was secret why do we know about? Was it leaked? intentionally?

Or may it be that the general mood of news consumers are now prone to feast on the "reasons" why the $ is falling? After many months of a declining US dollar index, the public seems to be coming aware of the currency market. It would maybe have been helpful if these types of stories were published near the tops of the dollar's value over the last year telling us why current valuations were unjustified. But that is never when these mass media stories come out. They always seem to come out at the end of a long trend as a rationalization for why it is happening.

It is also interesting to me, that while the dollar has been falling, its rate of decline has been easing for several months. Why don't we see the rationale come out when prices are falling quickly in the early or middle stages of a trend? It is one of those funny things that happen when human behavior and finance mix. And it always seems the same.

My take on this is that these types of stories are indicative of how aged this dollar down trend is in people's minds any how. It will not surprise me in the least to see the US$ index stage a sizable rebound very soon, despite the secret cabals.

On a blog trading note, both SPXU and EUO are relatively close to the stop levels. It would not be surprising to see those hit early next week with at least marginal new highs in stocks and lows on the dollar. I will still be interested in taking counter trend positions in both those markets if the move to new extremes quickly closes back into the current range. If stocks break out and hold at new highs for several days and seem to find support at those levels, I actually will be thinking more bullish for the next several weeks due to the "vacuum" up to near 1200 on the S&P.