Mr. Limm Likes Cash!
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We’re getting another mini-rally in the greenback, thanks largely I believe to the perceived death of Obamacare and the attendant printing those increased expenditures would have brought with them.    Of course, there are trillions in deficits rolling down the pike with or without socialized medicine on the table, so I don’t expect this dollar bounce to be particularly long lived.

Let’s have a look at  our dollar proxy [[UUP]] to see what we might expect.   First the daily chart:

As you can see, we gapped up pretty significantly yesterday, but we’ve been turning up for over a week now, stochastically speaking.   I don’t think it’s a major coincidence that the dollar rebound coincided with the increasing possibility of the Dem’s losing their filibuster-proof Senate and the markets perhaps getting the notion that spending might slow.   That said, there’s already many wheels in motion on the spending front, and I think perhaps this move reflects more “hope” than reality for the currency markets.  

As you can see, on the dailies we’re running into some decent resistance at both the $23.20 mark and then at the 200-day EMA at $23.32.   We’ll have to see if those levels hold, but looking at the weekly chart, you might think they will not.  The coil on the various oscillators seem to indicate we’re not done with this rebound yet:

As you can see, my near term weekly target at the 34-week EMA ($23.21) coincides with my above daily targets.   However, if that level is breached, it looks like the next levels of serious resistance will be $23.75 or so — which is a mile in terms of overall market, and especially commodity reaction.   

So be prepared to gird your loins if the dollar continues to strengthen.   For my part, I will be laying in wait to accumulate back more of the silver and gold names I dis-horded in December.   I added more Silver Wheaton Corp. (USA) [[SLW]] under $16 yesterday, and began buying Fronteer Development Group Inc. (USA) [[FRG]] for the first time at $4.87.    I like how it pulled back to the breakout area from the mid $5.20’s, as I had hoped it would.  

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In the mean time, it’s seems the banks really like this dollar move, as our favourite (sic) bank index (that Jeremy won’t fix the price indicator for) [[BKX]] has been cheering on this dollar move like they use them for inventory or something.

What’s wacky is that President Obama is currently jaw-boning the hell out of the banks with a threatened “extra-tax” to “pay back the American people” (despite the American people being paid back very favorably for TARP by all but the worst Congressional satraps at Fannie, Freddie, GM and Chrysler who, needless to even mention, are not included in aforesaid punitive tax).  

Could it be that everyone is whispering to one another and saying “he’s bullshitting us?”   Maybe.   Could it also be that this just today new threat from Goldman’s Favourite President about “limiting the size of banks” is going to end up yet another barrier to entry which will — soo-prize! soo-prize! — end up benefitting the largest banks by limiting competition?

Would Congress really do something like that??  (Stifling laughter)

Well, whatever the cause, the banks are off to the races like a drunken Irishman on Derby Day (or “like Jake”) in the last two days, even in the teeth of an overall market downdraft.    Check out the Index That Shall not Be Displayed — $BKX :

“What the horse,” no?

And now look at a current Jake Favourite, as I’ve been mentioning on The PPT for these last few days, Southern Powerhouse BB&T Corporation [[BBT]] :

Looking good, no Cisco?  

Here’s the weekly for the longer term play:

You can see my ultimate target on this one is $38, and if things continue as they have been, I don’t think that will be a long wait.   For the gamblers out there’s Pacific Capital Bancorp [[PCBC]] which Ragin’ Hat Tipped me towards a couple of weeks back at $1.08.   It’s been berry berry good to me.  I also like Huntington Bancshares Incorporated [[HBAN]] for the potential buy-out and PNC Financial Services [[PNC]] and UBS AG (USA) [[UBS]] for “best survivors” status.     For large banks, I continue to think JPMorgan Chase & Co. [[JPM]] will end up on top.    

Best to you all.

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