BLOG

WHAT’S IN YOUR WALLET? WANT A LOOK AT WHAT IS REALLY GOING ON?

OK, here is what I see.

dollar053116

The US Dollar firmed up in May after sellers took it to a new, recent low of 92. The uptrend is still in place, however what concerns me (aside from our nation’s $19 trillion in debt) is that each of the succeeding columns of Os are lower than the previous one.

Those of us that carefully watch Point-and-Figure charts know that this is a warning flag for a reverse in a trend.

And, the chart of UUP (long the US Dollar) seen below (as one would expect) looks very similar to the Index above.

uup053116

Put this together with the next chart of the Inverse Dollar ETF (investment of you think the US Dollar is going down) and more is revealed.

udn053116

Buyers are clearly dominating so far this year in UDN, betting that the US Dollar will go lower.

And, here the column of Os are each higher than the previous ones – again, an alert that the trend is changing.

It is my contention that there is only one factor that determines if an ETF (or a stock, or a bond, or a commodity, or a Cadillac, etc.) goes up or down.

That one factor is whether there are more buyers than sellers, or conversely, more sellers than buyers. It is the prevalence of one or the other that determines the direction of the price of anything – including the US Dollar.

I, for one, want to monitor what my dollars are doing.

Terry J. Atzen, Founder

The Investment Compass – www.theinvestmentcompass.com