Inside technicals and chart patterns by 
Another day of waiting to see whether the groundhog sees his shadow…only this time the groundhog is Congress. With all the closed door talks all that we can do is sit and wait.
The question I keep getting is what the 700b bailout will do to the dollar. I am split on that as I think the move could be bullish OR bearish depending on perception of the bailout worldwide. Any significant cash infusion one one hand could deflate the dollar but at the same time, could this also give the world a chance to regain confidence in U.S. securities?
The dollar shows this “wait and see” psychology as there are two issues…FIRST, will there be a decision before tomorrow’s 3:00pm “deadline” and TWO, what will the final bill look like?
- Raghee
My view is that the dollar is scarce right now.There is a shortage of dollars due to the credit crunch.This Explains why other major currencies havent really appreciated against the dollar that much.Again Euro zone isnt doing that well either.So its not a safe haven either.Once this bail out plan is approved chances are the dollar will benefit by being stronger.If it fails ie bail out plan, there will be a brief sell off of the dollar
As Fed bumps dollar cash into financial system, and sweap
with foreign banks in 250Billion dollars, I don’t see dollar
as a currency as any shortage. just in one week, FED
created 650Billion into money market, 410Billion into AIG etc banks rescue. and 700Billon on the way to banks. where
were the shortage of dollars? they are too possibilities to push dollar high. one is balance sheet negative, another is financial stocks short ban. the first one makes banks avoid to lending each other for dollars. however, this cannot be sustanded so long. secondly, short bans make hedge funds to short commodities, which to do buy dollars to price down basic materials affecting on commodities stocks. however, this can be lasting so long as well. because asian countries still have huge demand on basic materials. and if the price of basic materials is so low, miner/oil companies can reduce the output or delay the product on the market. this sector should be boom very soon if US wants to develop her economics. so my point is that dollar is top now. if it was not on top, US will dive into recession or depression hard. and all dollars will crush. so this scenarios should be avoided. thus the dollar top could be true! IMO could be wrong. thanks