Supermodel Gisele won’t be paid in US Dollars

I’m repeating the post from 11/5. There hasn’t been much new today to report except the oil bubble is a bit larger. Gold is up. Stock indexes up. Also, the server for this site was down for much of last night, so I’m just adding the photo of Gisele and the rest of the post stays the same.
Yes that title is correct. Brazilian supermodel Gisele wants to be paid in any currency except the US Dollar. That actually was all over CNBC today and yesterday, along with Bloomberg and the DrudgeReport. Also on CNBC, one talking head after another, unrelated to the Gisele revelation, bashed the dollar, and they pointed out that Warren Buffett and Bill Gross were still bearish on the dollar. I know trends tend to persists, but enough is enough. When all the passengers are on one side of the boat, it’s time to take a look at the other side. The slide over the last few years now has the look of a final blow-off. Now that a supermodel has joined the bandwagon, it has to be in the final inning. Why didn’t Gisele make her demands when the dollar index was 120? Why are all the dollar bears now joining the party with the index at 76? In more than thirty years of following markets, I’ve never seen such a one sided trade. Gold is getting almost that close to being as one sided as well. Even back in the last big gold bubble in the 1979 to 1980 period there were analysts talking on the other side of the trade. Now there is absolute agreement by every analyst and supermodel that the dollar is going to continue going down forever, and by implication, gold will continue uninterupted until it reaches $2000 or more.
Above is the chart of the weekly continuous dollar index. It is quite oversold, and the downmove seems to be accelerating.
The above chart shows the Baltic Dry Index in the top graph. The two graphs under are the stock DryShips and the FXI China ETF. The are all highly correlated at the moment. The index has lost a bit of momentum, but is still in a strong uptrend. It finally fell below the parabolic stop a few days ago. DRYS tested the low pivot of a couple weeks ago, and so far rejected that low, as can be seen by the horizontal blue line. The China ETF shows a similar situation. The markets are in extreme bubble territory and are quite vulnerable to a major decline. The street is almost universally bullish on this sector, so sell-offs are quickly met with buying as many are looking for dips to get in. At some point a dip may not be met by buying, and the bulls will all try to get out of the exit door at the same time, as eventually happens in every bubble. The price of the shipping index can be a good indication of economic expansion or contraction in China, although it is also influenced by the decline in the dollar as it is quoted in US dollars. Maybe Gisele should talk to the Baltic people and start having them quote the index in the Botswana Pula. I’m sure Mr. Buffett and Mr. Gross would be more bullish on the Pula than the US Dollar, as well.
The chart above is the Nasdaq Composite with its advance-decline line under. I drew a horizontal blue line on the composite prices to show where resistance back in July has now become support. However, the advance-decline line has now gone to new lows and has broken a support area, as you can see by the blue horizontal line in the lower sub-graph. As bullish as the price action looks, the advance-decline line is a cause of concern.
spy1105.pngAlso, today the S&P tested that support level on Oct 22nd, but has so far rejected prices at the lower levels and rallied substantially off the lows. As long as the Oct 22nd low holds, the trend is still technically up in the SPY.
The Comex Pit Gold contract was up a couple dollars, after the big up day on Friday, however the electronic session gave up the gain and it is currently trading down about a half a US Dollar. Maybe if Gisele hadn’t made those bearish dollar comments, the US Dollar might have been able to rally and knock gold down.