Leif Peterson

3 Things That Could Reverse the Dollar Rally

The dollar is way above its moving average, and as most know, the further it climbs the more it will fall. The points above are all well-taken, and you could also say what about the economy as a whole? Throw in Iraq, Afghanistan, Georgia, Poland's signature of the missile shield agreement, what's next for Ukraine, the election, oil? Markets are down 12-14% this year, so a catalyst is needed to get things back on track.

As a (former) gold bug, it seems that the sentiment during pullbacks is that no cares about gold. It's these times when gold bugs get the jitters -- when the expectation is that gold will sky rocket, but people are not buying. This is a definite case of deflation: After significant money pumping from monetary policy by the Fed, money is pulled back and people cut their expenses (high gas prices are killing families), and there is significantly less buying. The big money also jumps somewhere else. What I would like to know is where is the money going. Yesterday if you tracked MTU (Mitsubishi Bank-->huge loans to China), TSM (Taiwan Semiconductor), YUM (global foods), they were all down significantly. This rules out money jumping to several example global stocks, although more detailed analysis is probably warranted. Maybe those with a crystal ball know the answer.