Is the U.S. dollar still a target for the Fed?

Market Pulse: Jan. 4, 2011

COT data

On the weekly chart you see very little activity with the COT report. Last week we saw the commercials in a net short of 7,016 contracts down from 7,262 contracts the previous week. The 52-week low of 46,250 contracts net short was hit the week of Feb. 5 and the 52-week high of 2,587 net long was hit on Oct. 8. Starting in late August, the Fed started strongly posturing for a weaker dollar, and since they control this we saw what happened. This week we have had some very solid economic reports from the U.S. manufacturing sector and China announced on Jan. 1 a slow-down in manufacturing. No doubt this news had a positive effect on the U.S. dollar. One chart below you really want to view is the correlation between the U.S. dollar and the CCI CRB Index. See when the CRB Index hit its high last? Look where the dollar was. Now that we are seeing another peak in the CRB Index, the U.S. dollar is nowhere near where it was. Can you imagine where the CRB Index goes if in fact the Fed has its way and pushes the dollar back down to 71? I can’t.

Hope everyone reading this has a happy, healthy and prosperous 2011!

Commodity 12-mo low
12-mo hi
3-Jan
27-Dec
Cattle (feed) -2,917
7,100
2,534
2,347
Cattle (live) -73,179
-18,177
-42,259
-43,601
Hogs -38,039
836
-9,201
487
Corn -394,553
119,389
-394,553
-371,984
Oats -5,822
829
-5,822
-5,761
Soybeans -203,215
56,797
-203,215
-186,802
Soybean meal -90,487
-6,350
-73,749
-75,270
Soybean oil -111,786
32,394
-87,730
-83,818
Wheat -16,413
82,654
-11,689
-3,724
Orange juice -21,746
-6,588
-16,635
-16,468
Coffee -47,729
-4,637
-41,500
-41,521
Cocoa -49,897
8,586
-18,265
-14,754
Sugar -241,259
-104,983
-216,482
-214,952
Cotton -69,857
-12,970
-37,600
-41,326
British pound -31,274
97,211
20,420
11,124
Canada dollar -105,107
-13,109
-61,599
-50,851
Euro FX -62,835
124,494
27,527
13,833
Japanese yen -52,533
92,866
-23,849
-2,369
Swiss franc -33,169
27,482
-25,021
-19,908
US dollar index -46,250
2,587
-7,016
-7,262
Mexican Peso -118,008
-14,488
-88,096
-83,068
Australian dollar -102,706
-10,793
-84,969
-79,150
S&P 500 -88,893
33,981
-41,537
-41,972
T-note -10 yr -74,761
356,573
138,833
139,745
T-bond -30 yr -43,324
158,206
43,365
56,294
Eurodollar -1,179,414
105,872
-184,615
-148,471
Crude oil -200,484
-23,057
-198,611
-191,281
Heating oil -69,179
7,568
-60,994
-57,369
Unleaded gas -91,597
-10,453
-80,805
-83,590
Natural gas 111,345
179,433
159,768
159,430
Copper -35,704
1,793
-35,147
-35,704
Gold -302,740
-207,691
-259,770
-251,808
Platinum -32,628
-15,759
-29,067
-27,327
Silver -65,413
-37,800
-50,891
-47,057

Commercial Net Tracker instructions:
This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.

Proceed to Page 3 for this week's detailed fundementals charts...

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