Market Outlook
Before we fill your head with another worry, we take a glance at the market. We told you repeatedly in our last few articles that the Dow appears to have a dual consolidation range within it. There are two ranges. A range within a range, if that is clearer. The rise in the market last week only made it reach to the top of the lower range. The market needs to breach 33,000 to be safely within the other or the top range. The volume suggests that the market will run out of gas in this (bounce) rally. The phonies and schills will seek to persuade you to buy. We recommend caution. We called this market is in a consolidation range over one month ago. We have been correct.
Now, we have a new fear concerning the market action and price. Whenever the market forms a consolidation period, it is building cause for its next move. The longer the time period, the greater the move. The Fed's meeting is on 21st of September. Timing is crucial. At the moment, the market could rise up until that meeting. It will react to the interest rate hike. If this bounce does not clear 33,000 in the Dow, and it did not, so look out below!
King Dollar Worry
Last week, the dollar hit a new high at 110.79. It fell to 108, but that price level was rejected. It closed Friday at 109. The market does not like a strong dollar although it is good for US consumers. Our greedy, small minded producers have outsourced everything. So, they lose profits on foreign made products when they come back to sell in the US. While this may worry Wall Street, it is a killer for the global market. Keep in mind, the war in Europe is causing hardship with inflation pertaining to oil, gas and their factories and citizens in the EU. Their small minded, no vision leaders had years to prepare for the present situation. They should have begun LNG for energy. Granted, Germany has made some moves to alternative energy as well as Holland. France sticks with its dangerous nuclear and the rest, will feel a cold winter. Maybe, they should thin their forests to stop wild fires and give the wood to its citizens to keep their homes warm?
Anyway, the euro has fallen to par with the dollar and it actually fell lower. This is the trend. This translates to rising inflation in the EU. However, they are not alone. The Japanese yen is only worth .70 cents? I don't know about you, but I still see a lot of Japanese cars on US roads. How about made in China? Everywhere you look and on almost eberything that you buy, you see that label. If that is true, how can the Chinese yuan be only worth .14 cents to the US dollar?
Now, we realize that many commodities must be purchased in US dollars. This point is central to Putin's desire to have Russian oil sold in rubles as the Chinses want you to use the yuan. This is visual conflict. There is also unseen conflict. There are derivatives on oil and gas. They are in a losing position due to the war and future outlook. This could cause financial contagion. My beloved country has leaders who have abused our reserve currency status. Our debt is becoming unpayable. This whole situation coud blow over or blow up? We feel that King Dollar is only worth .72 cents. Our forefathers had it right when they made gold our currency. After the Federal Reserve, the international exchange system is the second most corrupt aspect in the world. The unwarranted rise in the dollar spells rapid inflation to the global community. If the dollar is replaced, it spells possible civil unrest in the US. Let's pray that this will pass. Peace.
