Stocks mixed, dollar makes new lows

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Not much to say about stock indexes. The S&P and Nasdaq had up candles but closes were mixed. The S&P advance/decline line improved a bit, and the trend indicator has now come together and if the market doesn’t fall apart in the next day or so the trend could turn positive according to the trend indicator that I use. Market structure would turn positive if that pivot I pointed out a couple of posts ago is taken out. The more important story today is Bernanke’s reaffirmation that he doesn’t care about the falling dollar and the resulting inflation. It is more important to manipulate the natural cycles in the economy and postpone any contraction, even if the ultimate cost is much higher. But I don’t deal with fundamentals here, so enough of my opinion. The US dollar fell to new lows. The chart above shows the inverse, as it is the Euro Currency in relation to the dollar. Today it smashed through the psychological 150 area. I had thought the range would hold. The dollar has been very much oversold and the bearish case very overcrowded with speculation. But with a Fed and administration that seems to think that a lower dollar is a good thing, or if not, at least doesn’t care about what the longer term implications of a lower dollar will be, there was just no reason for support (or resistance in the case of the Euro). This of course spilled over into the gold market. I guess the commodity bubble will get larger before it pops. I’m still holding mining shares, but I haven’t participated in the gold market directly. Gold has been stronger than most of the shares. The most wild market in the last few days has been Wheat. There has been a parabolic move up with expanding ranges, and today prices were all over the place with larger than a $2.50 range with a close right in the middle. That’s a larger range than Wheat usually sees in an entire year. When this kind of action occurs it is usually near the end of a move. I can see this type of activity spilling into many of the other bubble markets.