Market Timing

Fifth Third Bancorp FITB and Chemtura CEMJQ on the Watchlist

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fitbcemjq

I am initiating FITB and CEMJQ on the BestOnlineTrades recommended list with buy stops.  That means that they are not fully recommended yet but are positioning themselves possibly for some good upward movement.

FITB is a mid cap bank that has a fairly clean chart and has been price trending upwards for quite some time now.  It has that run away rally during early May but since that time (about 2 months) it has consolidated in a slow downward slanting wedge of sorts.

Now it finds itself kissing the up trendline as of today and so far holding ground.

So I am initiating a buy stop at 7.60 for FITB on the premise that once it is able to get above down trend resistance we could start to see a new up trend.

CEMJQ or Chemtura is the Chemicals company with large international exposure that could see benefits from a collapsing dollar price.  That one has also had a nice run along and uptrend line and done a more violent pullback back to up trendline support.  I am initiating a buy stop on CEMJQ at .2750

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US Dollar Index Barely Holding Crucial Support

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usd20090721

The US dollar index is barely holding onto crucial support at the 79 level.  This is a MAJOR story in my opinion and could have dramatic implications for several markets including forex, the broad market and gold.

The clear story with the US dollar in 2008 has been the MEGA bounce that it was able to achieve with the flight to safety trade and liquidation trade that was occurring all through 2008.  The US dollar was the ‘least worst’ currency in light of all the worldwide macro problems occurring then.  But now, with calmer heads prevailing and the US administration printing money and starting new programs like they will never go out of style, we see the US dollar once again weakening.  It has now fallen to the 79 range of support.

The 79 range of support is not a simple support, it is a very significant support that goes all the way back to 1990, clearly a significant length of time for a support level.

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