Nov 9, 2005

Daily Forex Commentary
By Jack Crooks

Key Reports due Tuesday (WSJ)
7:45am: ICSC-UBS store sales index for the week of November 5. Previous: +0.4%.
8:55am: Redbook retail sales index for the week of November 5. Previous: +1.3%.
5:00pm: ABC/Money consumer confidence for the week of November 5. Previous: -21.

Quotable
"I'm short on the dollar," said Bill Gates, the world's richest man, at the weekend from his lofty perch as the guiding light of Davos. "The old dollar, it's going to go down."

So why are you so sure about that Bill? "Well, it's the deficits, of course. "And plus, I have a real good friend. His name is Warren [Buffet]."

Taken from Currency Currents January 31, 2005

FX Trading
It was nice to see one of last year's Davos "guiding lights" make a public capitulation on the dollar. We are referring to Buffet of course. Now we wait for the other shoe to drop - Gates.

Two of the world's smartest beings got their very public dollar call very wrong. It goes to show you that intelligence and a belief in the consensus can lead one badly astray, especially in the world of currencies. (The consensus was hung up on what we have long referred to as the "Double Ds of Doom" - the current account deficit and federal budget deficit.)

The Double Ds didn't just catch the attention of Buffet and Gates as justification for their multi-billion dollar bets, many of the "really smart" people got it wrong. And what is interesting is the fact that some are still clinging ever so tightly to that theme. Call it ego, call it conviction, or call it crazy, but it tells us there may be more dollar bears out there that still haven't capitulated.

Though the open interest levels in the US dollar index suggests a speculative bullish extreme is shaping up in the buck on a daily basis, which may need some correcting, on a weekly basis, the chart of the dollar index suggests there is plenty of room to run ...

Black Swan offers a subscription-based currency advisory service for forex and futures traders.

Jack Crooks has actively traded in global equity, fixed income, commodity, and currency markets for more than 20 years. He is president of Black Swan Capital, a currency and commodities market advisory firm - BlackSwanTrading.com

China Travel

China Tours

Yangtze River Cruise

Great Wall of China

China Airline

Map of China

$nbsp;

Head Office: Rm 202, Hau Fook Mansion, No. 8 Hau Fook St., Kowloon, Hong Kong
Thailand Bureau: 11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110