What to expect from the US Dollar Index in 2012

Market Pulse: Jan 17, 2012

COT Data

Looking at the five-year weekly chart below you can see where the US dollar hit its low back in 2008. If you recall that is when many commodities hit highs. Remember crude at $147? Now look at how big money is posturing in the US Dollar at the beginning of 2012 — looks more similar to the beginning of 2010. The one main ingredient for the US dollar is the euro, which is expected to have a rough 2012. If you have been reading “Market Pulse” for a while, you know how I feel about expectations and predictions. They are like opinions, and you know what they say about opinions. You see where weekly momentum comes in. And that is something you can see only on a chart. Watch for Commercials liquidation similar to 2010 and watch the market. Or better yet, what happens if Commercials continue adding to net shorts?

I get a kick out of how the US Dollar Index over 80 is considered strong. Look at the monthly chart below and so will you. Look where the index was trading just 12 years ago.

You now have an idea of what to watch for regarding the US dollar in 2012. I have no doubt there are going to be many trending opportunities in 2012. Big money definitely will see to that. Have a prosperous week.

Commodity

12-mo low

12-mo hi

13-Jan

6-Jan

Cattle (feed)

-1,290

5,543

482

894

Cattle (live)

-40,877

10,437

-13,384

-17,545

Hogs

-46,574

21,270

-7,541

-11,144

Corn

-413,915

-36,487

-113,770

-81,679

Oats

-7,738

83

-58

-359

Soybeans

-203,260

28,178

-20,068

-11,900

Soybean meal

-84,656

32,081

7,650

16,543

Soybean oil

-117,444

29,745

-5,764

1,856

Wheat

-32,577

82,335

75,002

65,502

Orange juice

-22,341

-9,769

-16,279

-14,529

Coffee

-45,699

1,153

-3,540

-2,412

Cocoa

-41,808

10,252

8,714

8,488

Sugar

-221,694

-25,626

-31,975

-41,174

Cotton

-46,785

-2,152

-19,085

-16,267

British pound

-66,435

88,682

55,613

47,751

Canada dollar

-115,190

25,942

19,007

18,500

Euro FX

-124,855

181,662

181,662

166,069

Japanese yen

-64,864

76,983

-56,728

-51,657

Swiss franc

-42,387

26,491

26,491

22,720

US dollar index

-53,158

14,003

-52,962

-49,326

Mexican Peso

-140,414

39,901

24,549

28,686

Australian dollar

-110,025

479

-60,123

-49,161

S&P 500

-77,473

73,398

-11,225

-16,359

T-note -10 yr

-20,966

229,611

15,661

10,459

T-bond -30 yr

-20,389

88,803

19,453

16,444

Eurodollar

-408,407

1,126,194

590,076

826,425

Crude oil

-319,669

-114,385

-195,395

-172,152

Heating oil

-63,197

-4,204

-39,501

-31,858

RBOB Gasoline

-84,937

-38,417

-79,799

-71,286

Natural gas

108,160

228,910

133,704

137,370

Copper

-35,687

14,419

6,835

7,834

Gold

-287,634

-159,153

-166,574

-161,843

Platinum

-35,249

-18,670

-22,486

-21,919

Silver

-57,793

-14,132

-19,062

-15,916

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.

If you need help understanding how to understand how to use the COT report to your benefit, please email me at Gary@crbtrader.com and put COT report in the subject line. Please include your name and telephone number in the email.

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

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