Seeking Alpha
  • Joseph Stuber
    Somebody is dumping gold and bonds big time. 10 yr is up to 1.82. Gold down 29. All the while the dollar is plunging. Looks fishy to me.
    12/18/12
    Reply (22)
    • Dr. Kris: Maybe a lot of hedge funds getting poised for major year-end redemptions?
      12/18/12
    • Joseph Stuber: Looks like commodity traders are getting ready for a huge sell off in the euro. That's my guess.
      12/18/12
    • Dr. Kris: Joe: How is the euro tied to commodities? I'm not an expert in this area.
      12/18/12
    • realornot: Joseph: I am picking that up too. I am shorting the EURO to see.
      12/18/12
    • untrusting investor: Yes, the euro recent strength seems pretty unwarranted.
      12/18/12
    • Joseph Stuber: @ut it sure seems unwarranted to me. There is a lot going on that seems unwarranted.
      12/18/12
    • Joseph Stuber: Dr kris the euro/usd relationship largely defines the value of the dollar. A weak dollar drives risk assets/commodities higher.
      12/18/12
    • Joseph Stuber: That is particularly true with precious metals. Commodities like corn not as much as supply/demand plays a large role on those.
      12/18/12
    • Joseph Stuber: Crude oil too is driven by supply/demand as much or more as dollar strength but the dollar has an impact here too.
      12/18/12
    • Joseph Stuber: Dr Kris I just read your bio. Interesting. You seem a little to sophisticated to be asking how dollar strength impacts risk assets.
      12/18/12
    • Dr. Kris: Joe: I understand the inverse relationship between USD & commodities; just wanted to know what was so special about the euro...
      12/18/12
    • Dr. Kris: ...And just because today was risk-on doesn't mean it's always the case, i.e. gold & USD *can* move together.
      12/18/12
    • Dr. Kris: For example, since about the third week in Nov., both gold ($GLD) & USD ($UUP) have both been moving down.
      12/18/12
    • Joseph Stuber: Dr Kris I got it. I clearly went well beyond the scope of your question then.
      12/18/12
    • Dr. Kris: The euro ($FXE) broke out today meaning more upside likely. Euro banks are on the mend & bond rates have fallen, esp. in Italy & Greece.
      12/18/12
    • Joseph Stuber: The euro is also up against its upper band on the mean reversion channel on the hourly, daily, weekly and monthly chart.
      12/18/12
    • Joseph Stuber: Also, up against the top of RSI on all charts. Eurozone is in a fix as we are. Hard to know which is worse. My bet is down hard.
      12/18/12
    • Dr. Kris: Joe: I'm not a fan of the RSI; support/resistance levels are much more telling, at least for me. The $FXE seems to be putting in a double...
      12/18/12
    • Dr. Kris: ...bottom at $120. Looks bullish in all time frames and appears to be forming the classic inverse head & shoulders pattern.
      12/18/12
    • Joseph Stuber: Dr Kris Well, I bet we find out pretty quick whether it continues higher or turns lower.
      12/18/12
    • Joseph Stuber: . . . at least neither one of us is hedging on our call here.
      12/18/12
    • Dr. Kris: BTW, I'm always the one in the room asking the dumb question.
      12/18/12