Michael Michaud's  Instablog

Currency Forecasts - Intraday Daily Weekly Monthly

Glance at the recent news headlines, and it might feel like the world is ending for the U.S. dollar. Take a look at this sample line-up:

* US investors abandon the falling dollar to buy stocks (The Times)

* Dollar Slump Persisting as Top Analysts See No Bottom (Bloomberg)

* WORLD FOREX: Dollar Declines As Investors Embrace Risk (Wall Street Journal)

But "feels" is one thing -- and the reality of the situation is quite another. If you haven't recently seen a chart of the EUR/USD, the world's most watched (and traded) exchange rate, take a look at this November 23 chart from EWI's intensive Curency Specialty Service:


Despite the near-panicky headlines, you can see that for most of November the EUR/USD has gone sideways! Yes, big swings up and down -- but almost zero net progress, so far. In the words of EWI's president Bob Prechter,

"The headlines this month are all about the weak dollar, but they should be about how the dollar is hardly falling any more despite ubiquitous bearish opinion about it." (November Elliott Wave Theorist; online now.)

To find out what this sideways price action implies for the dollar short-term, read the latest EUR/USD intraday and daily forecasts inside Currency Specialty Service now.

Click here for the Currency Specialty Service

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The Market Week Ahead

First Happy Thanksgiving! Be thankful for everything you have now and everything you want for the future. Amen

Second, this Friday is the USA Canada, and Germany Unemployment Reports, along with Australia and European Union Central Bank Interest Rate decisions are coming in. Thanksgiving week historically has been strong. Even with the important data reports coming in this week, but with the shortened trading week, it could be somewhat relatively calm with big players starting the holiday early. The dollar is still the big issue right now. Forex traders might be watching the stock market, and stock traders might be watching the forex market for direction clues. The tide could possibly be turning here for a reversal, and possibly a major one at that for the dollar and stocks for the time being. I’m looking for a dollar rebound and stock selloff this month or next. Let’s watch and be ready to move it does.

Important Economic Data Reports This Thanksgiving Week

Monday: Canada GDP Report. Australia Manufacturing Index Report

Tuesday: Australia Central Bank Interest Rate Decision, and Commodity Index Report. Switzerland GDP Report. German Unemployment Report. USA ISM Manufacturing Report.

Thursday: European Central Bank Interest Rate Decision. Euro-Zone GDP Report

Friday: USA & Canada Unemployment Rate Reports

My Stock Pick This Week

Is sell short on a USA Coal producer. Even with commodities strong right now, I believe we will be seeing lower demand and prices sometime soon. This company is capitalized at $1.3B with 68% owned by insiders, with an 8% dividend. The dividend is a plus, and possibly the insiders large holdings is a plus, but watch if the insiders start selling big. Between February, 2008, and September 2008, insiders were all sellers between 27 and 24 prices. They sold before the biggest down-leg of the market started in October 2008, so I would suggest to watch the insiders like a hawk. Long term this company products are a buy, but look for lower prices to buy in longer term. Right now, I see a low-risk high-reward sell-short trade setup on it. Stick to stop-loss in case the price keeps going up.

Sell Short Alliance Holdings – Ticker AHGP

Sell Entry: 23.64 to 23.00

Stop-Loss: 25.62

Take Profit Areas: 22.36 to 21.08, 18.68 to 18.11, 17.59 to 17.05

Alliance Holdings Company Profile

Alliance Holdings GP, L.P., through its subsidiaries, produces and markets coal primarily to utilities and industrial users in the United States. It produces a range of steam coal with varying sulfur and heat contents. As of December 31, 2008, the company operated 8 coal mining complexes in Illinois, Indiana, Kentucky, Maryland, and West Virginia, as well as operated a coal loading terminal on the Ohio River at Mt. Vernon, Indiana. It also had approximately 686.3 million tons of coal reserves in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia. In addition, the company leases land and operates a coal loading terminal, with a capacity of 8.0 million tons with ground storage of approximately 60,000 to 70,000 tons, on the Ohio River at Mt. Vernon, Indiana. Further, it engages in trading of coal, as well as offers services, including ash and scrubber sludge removal, coal yard maintenance, and arranging alternate transportation services. Alliance GP, LLC, serves as the general partner of Alliance Holdings GP, L.P. The company is based in Tulsa, Oklahoma.

Click here to review and trial the Trading Software we used in determining our sell short position on AHGP.

Click the Alliance Holdings Stock Chart for a larger view.