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Two Ways: Dollar Bears Overstaying Welcome

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Strengthen your portfolio in good times and bad.

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Dollar bears overstaying their welcome?

Bearish bets against the US dollar are becoming more and more crowded, so says Mark Gongloff of the Wall Street Journal. There are a number of reasons for the sentiment, among them, a burgeoning US budget deficit.

But Gongloff warns that these bets could sour quickly, especially if a US economic recovery comes faster than expected.

A full recovery of the US consumer seems unlikely, but the country merely has to outperform its foreign competitors. For more on the US economy, see Mike Shedlock's Evaluating the Odds of a Double-Dip Recession.

From the Bull Pen: If you believe that fears of dollar weakness are overdone, the 20+ year treasury bond ETF (TLT) is one vehicle to consider. Sell stops can be set around $95 to $94 depending on your risk profile.

From the Bear Cave
: The dollar is stronger this morning against most currencies, but bears view this as merely a dead-cat bounce. The fact that the dollar is the world's reserve currency is where the main problem lies (see the Triffin dilemma). Global lumber producer Weyerhaeuser (WY) is one company to consider in a weak dollar environment. A sell stop in the near term can be set near $37.

A Quick Check Around the World

Asian trading closed with the Nikkei -0.70%, India 0.18%, Hang Seng -0.70%, Shanghai 0.15%, and Taiwan -0.32%.

Across the pond, we see the FTSE -0.64%, CAC -0.66%, DAX -1.14%

As of 8 a.m. EST, S&P Futures are trading -6.00 to 1055.00 and Nasdaq futures are -7.750 to 1713.50.

A Look at Commodities

Over in commodities, crude oil is -1.34 to 70.70 while gold is -7.60 to 1003.00 this morning. Silver is -0.30 to 16.76 and copper -2.350 to 274.75.

The dollar index is +0.4050 to 77.0750.

On the Radar

Economics

10:00 Leading Indicators 0.7% cons

Click here for the full trading radar.

Another great weekend of football! Who dat! Welcome back, Minyans, and have a great day.
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No positions in stocks mentioned.

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