Nothing significant being released today helps to keep the dollar afloat.  After another near collapse in the dollar on Thanksgiving and some profit taking on Friday all is calm in the markets this morning. Although The European open was certainly all about selling dollars.  Dollar buyers came out of the woodwork and people content with 1 penny profits prevailed for now.   The yen continues to remain a hot commodity and has maintained it strength against the dollar.  Going forward we have some data coming out of Japan this evening and IFO from Germany tomorrow morning which could make some waves.  Tomorrow evening more info from Japan which will give some insight into the domestic consumption aspect of the economy which has to this point been underachieving.  A solid increase in retail sales in Japan would help support the case for a strong Japanese economy which so far been based on strong business spending and high corporate profits.  Perhaps what economists fail to realize is that Asians are not Americans and don’t make a habit of living beyond their means and spending every last dime.  So even if corporate profits are up and a trickle down effect is occurring it doesn’t mean that retail sales will benefit much.   

Since this is a Friday afternoon I am not advising any fresh positions to be put on.  I still do like Yen long, especially since there was a small pullback today which allows for a higher entry price on a short.  I just don’t like the idea of putting on trades on Friday afternoon.  I was out and about earlier supporting Ron Paul so please forgive my tardiness and look to buy Yen on Sunday. 

After digesting their feasts American traders spit out Euro at $1.50 today.  Most likely the physiological effect was involved as well as weak industrial data released on the holiday.  Poor numbers from Britain did little to help the Pound hold onto recent gains also.  There is talk that the dollar Index will find support at $.75 but I for one still expect to see Yen strength going forward.  So if the DX can hold $.75 it will be at the expense of the Euro, Pound, and Cad.  Most likely some position squaring and profit taking going into the weekend occurring, to slow the momentum of the dollar selling.

I hope you listened to me and went long long yen on the 18th with a trailing stop and reentered at a higher price as I suggested.  The yen has recovered everything it lost against the pound in the last year.  The yen is still poised for further gains, and is still the currency I feel most confident in buying.  It may be wise to take profits today however just in case there is some volatility tomorrow due to illiquidity.  The last thing you want is a stop triggered right before a 200 pip plunge in the market.  Well that is why trailing stops were invented; I suggest you use them if you decide to stay in overnight.  Happy Thanksgiving. 

It is a year ago tomorrow since the big slide in the dollar was triggered.  While most of us were busy digesting a fantastic meal and could hardly move while being overstuffed the market was moving without us.  A creepy thought just occurred that we were being fattened up for the kill.  Tomorrow being the anniversary should be very interesting, expect lots of Yankees to be exiting the market today for fear of being on the wrong side of a big move in tomorrow.  This means exiting dollar short positions. Only the truly addicted and truly greedy will be trading tomorrow in the U.S., so don’t be surprised to see some bank traders in there.  Although in reality it will probably be a trading robot pulling the trigger for them.  The way things are going it looks like the dollar will be getting slaughtered right along with the turkeys tomorrow.  Although the Dollar may not have recovered its losses form a year ago tomorrow the Yen has and it seems fitting that a year to the day that the GBP/JPY would be at the exact same price it was then.  The big question is whether this holiday season will be the catalyst of the next big dollar decline or if the greenback will find a backbone.  Maybe you should use your wishbone tomorrow and depending on if you are a dollar bull or bear make a wish and see what happens.  Perhaps we will see the dollar begin a large recovery a year to the day from it’s collapse, if this cycle is truly complete.  A quaint Idea but fundumentally nothing has changed to warrent such a reversal.  Perhaps next year if Ron Paul is elected and he reinstitutes the gold standard on turkey day we will see the cycle complete itself.  Happy Thanksgiving everyone.             

The Japanese Yen is still a buy.  Although other currencies are backing off a bit against the dollar the Yen still has momentum and as I write this breaks 110 yen to the dollar.  My advice is to get in now and hold on as long as possible.  Do not be alarmed by the Japanese exporters feeble attempts to intervene, they cant stop a consensus opionion that the Yen must strengthen.  USD/JPY has the potential to test 101.5 this holiday season and actually break through it as well.  A trailing stop on this one could help as intervention and profit taking may cuase a quick spike on which you can asdd fresh shorts.  Happy hunting.