About Currency Currents

With Currency Currents, you can stay tuned-in to our current global-macro view and our analysis of key investment themes driving currency prices.

We consistently focus on the key asset classes responsible for the flow of global capital -- including equities, fixed income, commodities and, of course, currencies.

Nothing is off limits to us in this free-wheeling look at the markets. Some days you’ll receive ramblings on trading psychology, while other days we may take an academic approach in explaining esoteric economic issues. Ultimately we have one goal in mind: to help you get a handle on the key investment themes driving global capital flow. Because if you know where the money is going, it increases the probability that your position in the market will be a profitable one.

Who is Jack the Pipper?

Jack Crooks is Black Swan Capital LLC, President and Chief Trading Officer.

Jack is founder and president of Black Swan Capital LLC. He has also operated a discretionary money management firm specializing in global stock, bond, and currency asset management for retail clients. In addition, he was general partner in a firm specializing in currency futures and commodities trading. Neither firm is now in operation.

Prior to entering the investment arena, Jack worked in various corporate finance positions. He has written extensively on the subject of global currencies and international economics.

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August 2009

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Who leads ...

Posted 4 years ago | 12:49 PM | 28 Aug 2009

Key News

Copper advanced in London, heading for its longest winning streak in more than two years. (Bloomberg)

Business and consumer confidence in the 16-nation euro zone increased again in August. (AP)
Japan’s unemployment rate rose to a record 5.7 percent in July and deflation worsened. (Bloomberg)
Britain's economy shrank less than previously estimated during the second quarter of the year. (AP)
Poland's economy grew by 1.1 percent in the second quarter. (AP)

Quotable

“The evil that men do lives after them; The good is oft interred with their bones."

Shakespeare

FX Trading - Who leads ...
Somebody flipped the switch at 10:00 EST a.m. yesterday, as oil surged and the buck sank sharply:

Oil vs. US$ Index 60-min chart:

Same chart, we added S&P 500 Futures to the mix to show how incredibly tight this correlation was yesterday.

Risk appetite on display!

It’s a simple trade it seems: buy everything else and sell the dollar, as friend of mine pointed out yesterday. Only problem is we still aren’t always good at predicting the direction of everything else. It is nice to look at these charts in retrospect, and sound smart, but it is never easy in real time.

The move yesterday is not good for the dollar bull cause, not that you would even know there was a dollar bull cause. Which goes to the point: dollar sentiment is quite bearish. One would say bottoming type of bearishness. But Mr. Market is climbing the proverbial Wall of Worry; a powerful climb indeed.

We saw a technical analyst on TV yesterday making a good point: He said everyone is expecting a correction in the stock market, but it doesn’t have to correct yet when you consider how much it fell. He said there isn’t much resistance between here and 100 points higher on the S&P. You can see that in the chart below.

And incidentally a 100 point higher move would put the S&P just at a 50% retracement level from its October high to its March low—not unusual to see stocks retrace that much and still be considered a bounce in an ongoing bear market.

Thus, a blow-off rally in stocks could mean a test of the old lows for Mr. Greenie. Then, we would know dollar sentiment will be at bottoming levels for sure.

We are all stock traders now.