Posted on June 3, 2015 by Walter Otstott
U.S. Dollar Index: EURO 57.6% JAPANESE YEN 13.6% BRITISH POUND 11.9% CANADIAN DOLLAR 9.1% SWEDISH KRONA 4.2% SWISS FRANC 3.6% The Swiss Franc and the British Pound, though independent and not components there of, closely mimic fluctuations in the exchange rate between the Euro Currency Unit (ECU) verses the greenback. This is why I’ve repeatedly stated that the Euro has over 60% weighting in the US Dollar Index (USDX). Lumping them together, you can make the argument that the ECU has over 70% weight: Euro (57.6%) + British Pound (11.9%) + Swiss Franc (3.6%) = 73.1%. Hence, the Euro is a decent, inverse proxy to the buck (Bullish on US Dollar: sell Euro. Bearish on US Dollar: buy Euro). The other currency I’m championing, the Australian Dollar (alias “commodity currency”) is the value of the Aussie verses the greenback only. It also has no weight in the USDX. Because of […]
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Posted on June 3, 2015 by Walter Otstott
It appears the greenback resumed its swoon yesterday. For reference, below are the US Dollar Index; the Euro Currency Unit & Aussie $ charts. I favor the Euro as it represents over 60% weighting in the US Dollar Index, which makes it a good, high liquidity proxy in trading the buck’s value. The Euro zone has also been trashed for so long and the economic picture has been improving: so much so that investments which went to the United States are now starting to migrate back to Europe (Such is the ebb and flow of monies). As for the Aussie $, it is undervalued to my eyes (It historically trades around parity with the greenback). Because of the nature of Australian commerce, many consider it the “commodity” currency. It’s probably the closest thing to a commodity index. I consider limited risk plays against the greenback to be more than mere […]
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Posted on February 24, 2015 by Mitchel LaRocca
This is a spread trade that attempts to capture the changing interest rate environment. It appears from Tuesday’s Janet Yellen’s testimony the Fed will raise longer term rates later than sooner. At the same time she mentioned that the shorter term rates (such as Fed Fund rates) will be increased before the longer term rates. When rates go higher interest rate instruments move lower. This spread trade will hopefully capture the “timing” of those increases. If the scenario materializes the longer term 30 year bond should maintain their current rates within a certain range and keep prices at higher levels. At the same time the shorter term rates should rise causing the price of those instruments to drop. It sounds somewhat complicated but the bottom line is that the difference between the 30 year Bond (currently around 145-15) and the 5 year Note (currently around 120-00) could continue to widen. […]
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Posted on February 13, 2015 by Walter Otstott
I’m going to put what’s left of my neck on the line and state that silver has finally formed a solid base and is poised to resume its massive bull market. The correction from the 2011 high was pretty ugly and expensive; this is to be expected in a long term bull market. Observe in the chart below that during the choppy conditions of the last four-five months, silver has described an “upside down head & shoulders” formation. This is bullish. Industrial activity is starting to pick-up worldwide (at least it has hit a floor); the greenback is looking top heavy and silver has a lot of catching up to do with gold. Remember that silver is perishable and that there is less silver in the world today than there was in the late 1970s when it was trading at an inflation adjusted $150 an ounce! At this moment, silver […]
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Posted on February 13, 2015 by Walter Otstott
Crude oil futures are flirting with the 40 day moving average again, a point at which crude oil has seen violent price gyrations for the last two trading weeks. Should it be taken out and crude closes above $55 a barrel, we should see a vigorous rally to $74 (Next big resistance). Why not? Europe can’t keep going into the tank forever, et al. Regards, Walt Walter Otstott Energies & Metals Markets Dallas Commodity Company, Inc. The Colonnade, Building III 15305 Dallas Parkway, Suite 930 Addison, Texas 75001 (972) 387-0080 (972) 387-0018, fax (214) 537-9750, cell walter@dallascommodity.com Guaranteed Introducing Broker to R. J. O’Brien www.dallascommodity.com Information herein has been obtained and prepared from sources believed to be reliable; however no guarantee to its accuracy is made. Comments contained in these materials are not intended to be a solicitation to buy or sell any of the commodities mentioned. Past performance […]
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