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US Dollar Is In a Long Term Downward Trend

June 27, 2011 by Thomas Mullooly

Weekly Commentary for May 24, 2011

Silver gets whacked, Oil is getting a lot slicker. Gold climbs Monday, as stocks get sloppy. The euro stumbles, the dollar strengthens.

What is happening?

This dollar/euro thingy, as you will see, is important.

Look, the dollar is in a serious long-term downtrend.  Don’t let anyone tell you otherwise. Long. Term. Down. Trend. And, as in any downtrend, you get bounces up, along the way.

But they are bounces, not a change in trend. And what we are witnessing right now is a short-term bounce up in the dollar, while  the euro is giving back some ground gained recently.

If you are relying on a blog post for specific investment advice, you are making a huge mistake. Please speak with an investment adviser before making ANY investment decisions.

If you do not have an investment adviser, we encourage you to contact Mullooly Asset Management at 732-223-9000, or through our website.

Under no circumstances should the content discussed on this post be considered specific investment advice.

But I will say it again. US Dollar: Long. Term. Down. Trend.

If you have money in the market, you *want* a weak dollar. It is not un-patriotic. When the dollar is trending down, commodities and stocks do well.

Ben Bernanke wants a little inflation, which comes with a weak dollar.  Don’t forget that.

When the dollar has a bounce up (as it is doing now), commodities (like oil) and stocks do NOT do well. And if the dollar is rising (like now), the euro falls.

Pretty interesting the euro falls apart JUST as Greece becomes a big topic again, eh?

So how long do these bounces last?  Weeks? Yes. Months? No.

Funny thing is that all of these charts are simply doing the same thing: very few outright sell signals have been generated. And most charts are simply pulling back to the middle of their trading band.

But – I know – it’s frightening when the pull back happens in just a few days.

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Filed Under: Asset Management, Stock Market Comments

About Thomas Mullooly

Thomas Mullooly is owner and founder of Mullooly Asset Management, Inc. In 2002 Tom opened Mullooly Asset Management, a fee-only investment advisory firm. As an investment advisor, and not a broker, Tom works strictly for his clients. With the help of point and figure charting, Tom builds a realistic game plan for clients.

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