Friday, May 10, 2013

Dollar strength?

Dollar strength over the last couple of days seems a little hollow. At least that is the feeling I get from looking at the UUP etf.  I am biased and have been expecting the dollar to decline.
I know of no fundamental reason for strength in the USD. The economy IS improving, but interest rates are still low and the FED most likely will keep short term interest rates low for the forseeable future. When interest rates are too low and an economy is strong the currency is weak. At least that is my take on currencies and interest rates....
Despite the weakness in gold and silver today the gold and silver stocks saw strong buying. And there was continued buying in the energy space including the coal stocks. And continued recent buying in the steel and iron stocks. There are rumblings about a rotation from the "safe" stocks like the Proctor & Gambles and into the cyclicals. It seems to be happening. There was good money made in this situation in the early 2000's. Again in early 2009. And now.

I guess that I'm now a value investor....  Yikes!

Have a nice weekend,

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