You may find the 10-year monthly chart below more interesting, especially looking at the growth in volume over the past five years. Check out the lows hit below 72 back in 2008. Same year, if you recall, we saw crude oil trading at $147 per barrel. Now take a good look at the incredible climb from below 72 in July 2008 to above 88 in October 2008! I am still waiting for someone to explain to me how crude oil dropped more than $100 in almost the same time. Remember the term “peak oil?”
So I am hoping you can see what you need to keep an eye on to position yourself for another potentially large drop in the U.S. dollar. I have no doubt Bernanke would not mind seeing this because it would raise our exports. Did you see what China did with soybean orders from the U.S. in the past three weeks? Moving their business to Brazil, is it for better pricing? The only thing is countries like Japan are also racing to lower their currencies. The new prime minister in Japan ran on a platform of lowering the yen and has done a great job so far, especially if you are short. And let’s not forget about the euro. Does the ECB really want a strong euro? And will gold hit $2,000 in 2013? I may answer that question in the next Market Pulse.
HAPPY NEW YEAR!
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