Wednesday was a very good day on Wall Street – unless you were short. The theme was very simple: Dollar down, everything priced in US Dollars up. The index broke 76 and closed near the low of the day. In stocks, we have a Dow theory buy signal and a new 52 week high on the SPX. The Treasury yield curve got steeper again. Gold reached a new high. Oil is at the top of the trading range.
Seeing a pattern here? Where do we go from this point? Equity bears will point out that the volume was light, or will simply not be convinced. Whatever. If this rally is a head fake, then it’s a doozy. I am inclined to buy it, and am adding to long positions. Even if I didn’t trust equities, there is plenty to like in the commodity space. One way or another, if the Dollar is going to get trashed, there are going to be ways to make money on it. Next support level is at the lows of one year ago – 74.