3/2 Daily Commentary

The stock market rallied to the SP futures 30-minute M/A and retraced 38.1% but the wave count did not appear complete, so I did not short SP futures. 

I am using Nasdaq cash and futures as the key to wave interpretation because it has non-overlapping waves.

If my analysis is not correct then NQ futures trading below 2317 will indicate that wave (iii) is underway.  Time is running out for this decline, which should bottom no later than Friday at the close.

Later this year and next year, during the resumption of the bear market, the dollar will benefit.  While I held long stock positions I used long dollar as a hedge, so to speak.  My belief in the dollar is skin deep as it's days are numbered.  I think that even as the dollar rallies the move to bury it will continue and will surface after the panic phase of the economic downturn subsides.  The reasons relate to fiscal and monetary policy at this time and their effect on conditions around the world.  I would have used gold as a hedge except that EWI has been bearish on precious metals throughout the stock market rally.
Other nations cannot effectively combat the policies of the reserve currency nation. Ben was asked about the prospect of losing reserve currency status today and his response was that he is not seeing any moves to replace the dollar. Duh. It's happening behind closed doors. He also minimized the impact of this as having only a slight effect on interest rates. The more I watch his public statements the less repect I have for academics. Every nation has enemies, economic and political. A foreign political enemy sees the benefit of undermining credibility of it's rival. Ben does not appreciate how much he is contributing to the future success of America's rivals, who will garner business, contacts, talent, and prestige as a result of the dollar's fall from grace. This feeds right into military alliances as well.