07Aug11:41 amEST

The "Dollar is Trash" is the New, "Men Are Trash"

With the UUP ETF (for the U.S. Dollar currency versus a basket of developed economies' currencies) bouncing off the long-term $25 level we examined yesterday in this piece, the precious metals and miners are finally cooling off after an exhilarating run. Be that as it may, I see UUP is well off session highs as I write this, placing the burden even more on Dollar bulls to actually sustain a bounce. Should that occur, I expect the metals and miners to correct further, perhaps through Labor Day, and that (now) contrarian Dollar strength to eventually hit long-term wildly-extended Nasdaq leaders like AAPL AMZN MSFT NFLX, and more, a good deal. 

We discussed silver in yesterday's post, so today let us have an updated look at the gold ETF monthly chart, below. I can still easily imagine a scenario where the yellow metal dips and shakes out the newly-minted gold bugs to create a relatively shallow (by long-term standards, as you can see in light blue, even though short-term it can feel quite painful) "handle" of a massive cup-and-handle bullish formation. 

I, too, agree that The Fed and federal government's easy monetary and fiscal policies, respectively, will eventually come home to roost in the form of a currency and/or government bond crisis. The "Dollar is trash" argument has gained considerable steam this summer, but it still remains the world's reserve currency and one of the best houses in a bad global neighborhood. Also note Bitcoin getting hit here into the slightest bit of Dollar bouncing. Correlations are, indeed, running high. 

Elsewhere, some low key software earnings selloffs are of note: AYX DBX DDOG come to mind. The IGV sector ETF for software is also rather extended. Here, again, my key is the Dollar and if it sustains this bounce. If so, software is a short into next week as a group. 

Stock Market Recap 08/06/20 ... Saturday Night at Market Che...

 
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