Down goes the Dollar!  

That’s significant because it’s Options Expiration Day today AND we’re settling the December Oil Futures Contracts (/CLZ6) so the well-timed 0.5% drop in the Dollar (which we predicted – thank you!) is boosting oil, gold, the indexes – well everything priced in Dollars – you get the idea.  This is how they take advantage of TA people because TA doesn’t take into account the value of the underlying currency of the thing they are charting.  

To illustrate how silly that is, suppose you were charting the freezing temperature of a water and they kept changing the type of liquid but you just kept putting lines on the chart as if it were water all along.  

A person looking at the chart would believe the freezing temperature of water varies wildly and they would come up with all sorts of idiotic reasons to explain this and, if there was a market for betting what temperature water would freeze at, they would start naming the chart patterns and selling you analysis that claims to give you the inside edge to bet what temperature water would freeze at tomorrow.  

Does that sound idiotic?  Well that’s Technical Analysis!  Water freezes at 32 degrees F and that’s a F’ing FACT, not a theory.  F is also the first word in Fundamentals – where we deal in FACTS, not theories.  You can’t ignore a massively significant FACTOR, like the price of the Dollar and expect to accurately chart the movement of something that is priced in Dollars.  

Of course, at PSW, we are Fundamentalists and we do take these things into account, that’s how we knew to go long on Gasoline Futures (/RB) at the $1.325 line this morning – based on the chart AND the chart of the Dollar AND the expectation of a rumor from OPEC we discussed in yesterday morning’s PSW Report.

RUT/Jasu – Still 6 short at 1,312 for overnight.  Out of /RB and hoping for a dip before tomorrow’s close to go long into next week, $1.325 would make me happy to start. /NG I’m waiting for a new bottom and /KC I always have a couple of longs.