The definitive U.S. Dollar Rally Thread

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  • Sat, May 15, 2010 - 05:35pm

    #100
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    Re: The definitive U.S. Dollar Rally Thread

[quote=Erik T.]

Morph,

Interesting… I see your point but I wouldn’t go long the Euro at this point.

The trade opportunity that I do see (and it’s a longshot) is that the EURUSD is so ripe for a short squeeze that it hurts. That’s a recipe for a brief spike to an unheard of high.

The trade I’m tempted by is a limit order to SHORT EURUSD with an entry limit around 1.60. Whether it really goes to parity like Davos suggests is a crap shoot IMHO, but I do think the ingredients are there for a TEMPORARY spike north of 1.50, and that would be the short entry opportunity of a lifetime if it happens. Risk of loosing money because the EUR stays above 1.60 for a long time: get serious…

Erik

 

[/quote]

Erik. I’ll be watching the euro at the 5 minute, hourly, and daily marks for the next few weeks. I think a potential squeeze is setting up right now. If I see confirmation then I’m in with 3% trailing stops. Davos. It’s because you (the proverbial “you”, not you personally) think that “this is it” for the Euro is why I smell a trap.

Even a dead cat bounces after falling from a great enough height. 

  • Sat, May 15, 2010 - 05:40pm

    #102
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    Re: The definitive U.S. Dollar Rally Thread

[quote=Davos]

[quote=Morpheus]

If I do anything in the next few weeks, it’ll be to push the button on TradeStation and place a huge order on Proshares Ultra Euro. 

[/quote]Interesting.

I kinda think the Euro is heading toward parity.

[/quote]

Likely? Yes. Probably… Yes. 

But not yet….not yet. Erik knows exactly what I’m thinking. I suspect in the near future that the shorties might see the compactor. 

  • Sat, May 15, 2010 - 07:39pm

    #103
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    Re: The definitive U.S. Dollar Rally Thread

[quote=Davos]

A lot of really smart investors who I respect a lot got taken by surprise when they went long the Euro. Hendry, Thirston Howell the Third and others.

[/quote]

Davos, please show me where Hugh Hendry was ‘taken by surprise’ with this Euro weakness, I’m very interested in this. Thank you.

  • Sat, May 15, 2010 - 07:40pm

    #104
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    Re: The definitive U.S. Dollar Rally Thread

once this mess clears I plan on pushing the button for rare earth materials. Despite what some posters say China holds the keys/mines to these. It takes 2 tonnes of rare earths to build a wind turbine.

Davos, regarding REE, don’t stop at wind turbines – US military, automobiles, computers, iPhones, flat-screen tv’s all use rare earth elements.  The research I’ve seen says China controls 97% of REE output.  They have cheap labor and can look past moonscaping their environment.  The dirtly little secret of the green industry – the REE are mined in worker and environment unfriendly ways.

Regardless, there are reports that China may cut exports to zero (from 30,000 tons) in 2012 to keep enough for their domestic economic expansion.  Ouch.  I guess just add that to the list of “resource news items to keep an ear to.”  Estimates show world REE demand of 120,000 tons (up in a decade from 40,000 tons) increasing by 2014 to 200,000 tons to fill green technology demand.  

It doesn’t appear like there are many domestic alternatives either.  One company in the US (and one in Australia) I’ve found that have environmental permits to mine REE.  Besides them, it’s looks like an industry of small OTC companies, with a few in Canada.

Another potential cog in the REE story is supply chain expertise.  How quickly can the US scale up expertise of turning REE, the ore of which is often contaminated with radioactive elements, into finished products?

  • Sat, May 15, 2010 - 08:08pm

    #105
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    Re: The definitive U.S. Dollar Rally Thread

[quote=sjdavis]

once this mess clears I plan on pushing the button for rare earth materials. Despite what some posters say China holds the keys/mines to these. It takes 2 tonnes of rare earths to build a wind turbine.

Davos, regarding REE, don’t stop at wind turbines – US military, automobiles, computers, iPhones, flat-screen tv’s all use rare earth elements.  The research I’ve seen says China controls 97% of REE output.  They have cheap labor and can look past moonscaping their environment.  The dirtly little secret of the green industry – the REE are mined in worker and environment unfriendly ways.

Regardless, there are reports that China may cut exports to zero (from 30,000 tons) in 2012 to keep enough for their domestic economic expansion.  Ouch.  I guess just add that to the list of “resource news items to keep an ear to.”  Estimates show world REE demand of 120,000 tons (up in a decade from 40,000 tons) increasing by 2014 to 200,000 tons to fill green technology demand.  

It doesn’t appear like there are many domestic alternatives either.  One company in the US (and one in Australia) I’ve found that have environmental permits to mine REE.  Besides them, it’s looks like an industry of small OTC companies, with a few in Canada.

Another potential cog in the REE story is supply chain expertise.  How quickly can the US scale up expertise of turning REE, the ore of which is often contaminated with radioactive elements, into finished products?

[/quote]+1. And oh, by the way, do you get JD’s newsletter?

  • Sat, May 15, 2010 - 08:11pm

    #106
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    Re: The definitive U.S. Dollar Rally Thread

[quote=JAG]

[quote=Davos]

A lot of really smart investors who I respect a lot got taken by surprise when they went long the Euro. Hendry, Thirston Howell the Third and others.

[/quote]

Davos, please show me where Hugh Hendry was ‘taken by surprise’ with this Euro weakness, I’m very interested in this. Thank you.

[/quote]Hello JAG: Since I stopped doing the DG I don’t put stuff on spread sheets anymore. Can’t recall which blog I saw it on, he and the Third said basically the same thing, both sounded like they were holding on to their longs a little while longer before they were going to through the towel in.

  • Sat, May 15, 2010 - 08:29pm

    #107
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    Re: The definitive U.S. Dollar Rally Thread

PS JAG: If it is any help I have come to the conclusion that most of my favorite blogs that I follow went off the rails with this Greece/IMF/Euro thing. Basically I’m down to CM’s fine blog, 0Hedge, FSN, Jim Quinn’s & Sinclair’s. The rest I now just skim the RSS feeds. Also, it was a video, and he and on the other the Third were on the cover of the video. I’ll look after I get done with the grass, pond, ducks, garden and fixing the dryer and God knows what else.

  • Sat, May 15, 2010 - 08:30pm

    #108
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    Re: The definitive U.S. Dollar Rally Thread

Jim Rogers is also long the Euro (on Morph’s logic but way too early) and getting nailed.

Davos, who is Thurston Howell the Third? Obviously I remember the character on Gilligan’s Island, but you seem to be using it as a nickname for a hedge fund manager? I must have missed the memo on that one…

Erik

  • Sat, May 15, 2010 - 09:15pm

    #109
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    Re: The definitive U.S. Dollar Rally Thread

Davos,

If you follow Hendry at all, you know that this is a most absurd claim. He has been a USD bull since before the rally began. Now if this is a very recent claim, then I can accept that he has switched gears and is bullish on the Euro, since “everybody and their momma” is bearish. I googled for any recent commentary from him and couldn’t come up with anything.

Oh yeah, who is “Thurston”, Soros?

  • Sat, May 15, 2010 - 09:20pm

    #110
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    Re: The definitive U.S. Dollar Rally Thread

No, who is JD?

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