By: Steve Smith
OK, let me start by telling you I am being a little sarcastic in the subject of this email.
I just see so much fear-mongering going through the financial world. Podcasters, analysts, and other respected figures speculating on a dollar collapse.
Look, will the dollar collapse one day. Yeah, probably, one day…
But it’s going to be today. And it doesn’t look like it’s going to be for a long time.
I don’t have a crystal ball, but I can look at the numbers.
Look at this chart of the dollar index:
You can see the dollar has been under some pressure recently, be we are nowhere near the historic lows.
We spent more than a year in the ’70s in 2007/08 and again in 2010/11. And a significant amount of time in the ’70s in 2009.
We even broke into the ’70s in 1992.
And guess what, the dollar always bounced back. It never went to zero….it never got anywhere near zero.
And keep in mind, that while a weaker dollar isn’t necessarily ideal for main street, it is very good for public companies and the stock market…
Which can be very good for traders like us!
I know we have dropped a few points since April. But there’s been no collapse in the value of the dollar. There’s been a 9-point drop after trillions in financial easing and interest rate cuts.
That’s not unexpected. It’s natural.
So basically I am saying that for now and in relation to the dollar, “move along there’s nothing to see here…yet.”
As I said, I don’t have a crystal ball, but the US isn’t turning into Venezuela anytime soon.
In the meantime, make sure you grab a trial subscription to Options360. It’s just $19, and I cover this and a number of other economic issues on the bi-weekly members-only webinars.
Plus, I give you trade ideas weekly. The model portfolio is up 28% YTD, vs the S&P 500 which is up something like 4%.
If you don’t like it, you let the trial expire, and no worries. If you do like it, and everyone does, stick with it. A lot of people have the chance to pay for a full year just during the trial.
To Your Success,
Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.
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