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Time to sell Kiwi dollars, buy USD....

23 Aug 2009 02:13Peter Waring
The rally is on its last legs...

The NASDAQ stockmarket is about 50% up from its March 2009 lows. The Kiwi dollar has retraced 50% of its fall from the peak in 2008 to its low in March. These are staggering changes in a very short space of time. The question has to be asked, how much further can the stockmarket and Kiwi dollar go given that they have come so far already?

In March when the stockmarket was at its lowest, the general 'word on the street' was that the world was going to end, nobody was talking about a recovery. At that point the US stockmarket had a sentiment reading of only 2% bulls. At present, with the stockmarkets up 50% from their lows, sentiment indicators are showing readings of around 88% bulls - which is the highest reading since the stockmarket topped out in October 2007. And right now the general 'word on the street' as publicized in the press is that the recovery is here, and the recession is behind us. Does anyone see a pattern here?

Rob Pretcher puts out a warning ....

Rob Pretcher from ElliotWave (check out his book here) has been studying the market for over 30 years, and in his time has put out some outstandingly accurate calls. He called the top in 1987 before the crash and also called the top of the market in October 2007. In late Feburary 2009 - he put out a call for anyone who was short to cover their short positions, just before the market staged the major rally we have seen now for 5 months.

Pretcher is now saying, the USD is about to stage a major rally, and this will conincide with a sell-off in stocks in commodities. Perhaps now it's time to take heed, and move some of those Kiwi dollars into Greenbacks!

The Pretcher interview on CNBC is well worth a listen. Check it out here:

Peter Waring - http://www.marketsunplugged.com

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