US Dollar up against Malaysian Ringgit, Gold up sharply

The US Dollar has actually been gaining against the Malaysian Ringgit for almost two weeks now. It is difficult to find any currency that the dollar isn’t falling against, but on the chart to the left you can see the dollar advance on the right side of the chart. It is subtle, but if you look close you can see a little advance. I captured this chart late Thursday, and the quote as of Friday shows the dollar down a tiny bit from what is shown on this chart, but not enough to invalidate the little uptrend. The dollar index did push to a new all time low again today, but it was able to rebound enough from the low to close a few ticks higher by the close, at least in the cash dollar index as the futures contract was closed. The Euro currency made quite a spike up intra-day, but fell back to close lower on the session, with the look of another upthrust bar. So what’s the deal with the Ringgit?

I still keep thinking about that interview Jim Rogers did on CNBC. I know he has been a bull on the Malaysian Ringgit for some time, as he is a bull on sugar and many other commodities. He’s a smart guy. His Ringgit call has been generally correct, as you can see on the chart. (chart is in dollars, so downtrend on price bars is an uptrend for the Ringgit) His general bullishness on commodities in a macro sense has been correct. He’s not a timer, but has been making a bullish call on commodities for a very long time, and now some of those calls are coming true. Maybe even my opinion that the dollar will someday go up will come true if I keep saying it long enough. But it just struck me as funny when he said everyone should be completely out of the US Dollar, implying that it will keep going down for all eternity, with possible short term counter-trend rallies. He then suggested the best currencies to trade for the falling US Dollars would be the Japanese Yen, the Swiss Franc, and the Malaysian Ringgit. I just don’t see how those three currencies could be uttered in the same breath without at least causing some laughter. I don’t mean any disrespect for Malaysia, but comparing the Ringgit to the US Dollar is like comparing a Boeing 747 to a motor scooter. Sure, both are modes of transportation. The motor scooter might be more fun buzzing through the streets of a European village, and I’m sure at times the price of a motor scooter might go up at a time when the price of a 747 might go down. But you wouldn’t trade your 747’s in for motor scooters based on that. The two are worlds apart. And then exchange New York for Singapore? Again, no disrespect intended for Singapore. I hear it’s a fine place, and I’m sure Mr. Rogers will be quite happy living there as long as he doesn’t spit on the sidewalk. He’ll probably be closer to his investment interest in Asia, so that makes sense, and it’s always exciting to make a change and live in a new environment. But I just get so tired of the bashing of the US, the blame America first crowd. So the dollar is going down. It goes down, and up in cycles. Supermodels don’t want the US currency. Rap stars refer to Euros now, instead of the currency from their own country, and that for some reason makes news. Actors who have taken advantage of what this country has to offer and have profited greatly from it, are now meeting with and praising Castro and Chavez, and would be living in poverty under their systems, and bashing America and blaming it for everything that is wrong with the world, including acts of nature. Some of the very wealthy in business seem to be doing the same. Maybe something happens to people when they achieve more money than they could ever possibly use. I hope Mr. Rogers isn’t developing the same mental disorder as his ex-partner. The US certainly has problems. It always has and probably always will. It’s difficult being a superpower and economic power and always trying to fix things in the rest of the world, even if the results aren’t always what was intended. Sometime I wish we’d stop trying, but then we’d get criticised for that. But there is no other place on the planet that I’d rather live, problems and all.
The early fall in the dollar on Friday gave gold quite a boost. On the chart to the left you can see the blue lines on the price bars coming together to show a very flat trend, however momentum was moving higher from the oversold level. A rally was not a surprise, but what was interesting today was that gold held near the highs even when the dollar index recovered (with the exception of the Ringgit – but the Euro came off the spike and closed lower). Today was a short trading session, and the gold market in the US was closed yesterday, so not sure how much to make out of the move today. I’ll wait until Monday to see if the move up holds. If it does I would expect the trend indicators to resume the upward direction. So far this drop over the last couple of weeks looks like a bull flag, a steep one, but still a flag.
The chart to the right is the S&P mini-futures contract. It shows a clear downtrend, but momentum has gotten quite choppy. You can see the bars alternating from a white candle to a black candle with a random look. Short term momentum is diverging a bit here, so maybe there will be a correction back up. I would be careful of shorts right here. A rally up into the darker blue line world be a normal correction and probably a safer area to enter shorts.