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Minyan Mailbag - Basic Math


Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next discussion with that very intent.


Talk to me like I'm a fourth grader.

But why has the dollar rallied 4.4% literally since Jan 1? Nothing has changed. Doesn't the currency market, which is supposed to be smarter than the equity market, realize this? When you have the Fed saying that the single most important element regarding the health of the WORLD economy is the U.S. trade and budget deficits, shouldn't that ring a danger bell somewhere?

Plus, I am SOOOO sick of all the technicians that are saying the whole dollar move of the last three years, based on technicals, can be reversed.

IMO, and I know you agree, the ONLY thing that matters are the budget and trade deficits.

Minyan Neal

Minyan Neal,

You KNOW I agree with you in a big picture sense that something will
eventually give. After a 33% haircut, however, the recent bounce---and a continued lift to the 200-day (DXY 86.70) for that matter--can't come as a shocker. The dollar, like any other market that operates as a function of supply and demand, ebbs and flows as a matter of course. That's the basis behind wave analysis, seasonality and the business cycle.

A wise man once said that you can pick the direction or the timing of a move but you'll rarely game both. That's why markets are non-linear and why trading remains more of an art than a science. Now please go grab your Bob the Builder and join the rest of the class in the playground! ;-)


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