Market Comment - The U.S. Dollar Index

The U.S. Dollar Index (75.05 on Nov 23, 2007) has been tanking for so long that you can hear detractors gasp when it has a day on the upside. But wait … U.S. equity markets have been strong in spite of dollar weakness … and the Enron mess, and Worldcom and Long Term Capital and Amaranth and now the blatant subprime travesty.

Stop for a moment to ask yourself why U.S. stocks have continued to prosper in the face of all of these problems. I have one possible answer. Things are not rosy today in the U.S. business community, but what’s left of the tattered U.S. investment reputation is still a hundred times better than alternative choices to be considered elsewhere on the planet.

Here is the question: If U.S. stocks were able to make headway while their dollar skidded lower, what will the S & P 500 index do when the greenback begins to recover?

My guess? The world will scramble into U.S. markets. Timely contemplation?

Market Comment S & P 500 Index (1407)

Now that markets have taken another short term drubbing, I'd be really pleased to see a Santa Clause rally get underway sometime between now and the end of the year.

Having said this, I must repeat my admonition that the 1553-1555 all time high S & P resistance remains as a formidable barrier.