What's up with the dollar rally? In Europe, youhavetwo big European banks announcing writedowns; in Japan, you have the worst business sentiment survey in four years, so initially it was more Euro-Yen weakness than dollar strength.
But after 10 am ET, the dollar rallied on the slightly better than expected ISM news. Is this the bottom in the dollar? Not clear; but bad news globally would counter the continued Fed rate cuts.
As a result, commodities are down big. Gold, silver, palladium down 4-5 percent. Gold in a correction: gold is at a 6 week low, down 14 percent from its recent intraday highs. Who cares about six week lows?
Hey, when was the last time gold was in any kind of downtrend? 2006, and that lasted for all of a month. What happened? In addition to the dollar strength, yesterday was the futures expiration day...today you have to get out or take delivery. Looks like a lot of people (speculators) opted to get out. Same with platinum, palladium, and silver.
Looks like they took the money, and put some of it in the stock market. Financials, specifically.
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