The Return of the Almighty Dollar

When the housing crisis morphed into the credit crises in 2008, many of my fellow Americans—and the world—lamented about the decline of the United States as a world power. Flash forward six years later and the script has flipped. The good ol’ U.S. of A is once again viewed as a paragon of economic strength as emerging markets have struggled (think Russia, Brazil and China) and political crises in Eastern Europe, the Middle East and Africa have reignited talk of “flight to quality.”

Yet all the big talk has failed to generate America buying in the first quarter. Although the U.S. stock market has climbed above all-time highs, the market hasn’t maintained last year’s pace.

The dollar has fared worse as the U.S. Dollar Index has lost almost one percent in the first quarter, all despite the Fed’s ongoing tapering program and hints at rising interest rates as early as next year.

From a technical perspective the dollar index has built a strong, multi-year base below 80. Since November 2010 when the index hit 78, the U.S. dollar index has tested the 78-79 range at least six times and failed to break through (see the red line below).

The U.S. Dollar Index Weekly Front-Month Chart

The U.S. Dollar Index Weekly Front-Month Chart

Long term, buying the dollar index looks like a low-risk, high reward trade with a stop below the trendline—should the U.S. economy continue to chug along. After the latest fed press conference a few weeks ago, the dollar index shot up above 80 after bottoming around 79.3 on March 10. Now maybe as good a time as any to jump in on the long side.

Although the dollar index looks attractive, maintain flexibility. If things change unexpectedly, a break below 79 represents an excellent short opportunity.

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Where I’ve Been

It has been months, January 29 to be exact, since I last updated this blog. It’s time to explain where I’ve been and what I’ve been up to. Originally, when I accepted a new position at R/West Marketing, I planned to update this blog once a week. That has not happened and I apologize.

Transitioning back to full-time work has been rewarding but also tiring. There is only so much time I can sit in front of a computer without driving myself (and my wife) crazy. At the same time, my wife has made a job change as well. Last month she accepted an offer that has moved us from the Willamette Valley to the high desert of Central Oregon.

With my new location I’ve debated changing the name of this blog to the “High Desert Trader” to reflect my new surroundings. In the end, I’ve decided to keep it “Rip City Trader.” Although I no longer live in Portland, it will always be my hometown.

And now that we have settled into our new residence, I vow to maintain my pledge to blog at least once a week beginning now. My hope is that my once growing audience returns and we can resume the verbal scrum between bulls and bears in the world’s futures markets.

Despite the massive changes in my life these past few months, I have continued to trade with my attention squarely upon palladium. It’s a market I’ve been watching for a while that experienced an impressive multi-year breakout from consolidation a few weeks ago. Thanks to a perfect storm of fundamental and technical phenomena, palladium looks like the trade of the year. As events unfold in key mining countries, South Africa and Russia, as well as the global economy, I’ll keep you updated with technical analysis mixed in for good measure. Although I like to debate the merits of fundamentals, at the end of the day I am a technical trader and base my trading system upon technical analysis.

Stay tuned for my next blog post soon…it covers another market that I’m excited about both from a fundamental and technical perspective that presents another potentially profitable opportunity. 🙂

I Got a New Job

This week I accepted a new position with an up-and-coming marketing firm here in Portland. I’m excited about the opportunity to grow my communications career, but that also leaves with me with less time to devote to this blog.

The good news is I plan to continue this blog for the foreseeable future. The bad news is I will be unable to continue the current frequency of posts. Therefore, I will discontinue my links post that I produce about three times a week. I really enjoy putting these together but it just won’t be possible to keep them up between commitments to family, my new job and my actual trading.

Going forward I plan to post weekly features focusing on certain markets and/or trends I have been tracking, similar to what I’ve been doing between the links posts. I plan to continue covering diverse markets from natural gas to orange juice and anything that sparks my interest in between.

In short, I hope you keep coming back. It has been a pleasure to share my perspective on futures trading these first three months and I can’t wait to continue the journey.

Happy trading!

A Quick Note…

During the next few weeks I won’t be able to post my regular daily links as I will be attending to some personal matters. However, I won’t totally be away. Instead of my usual commentary on the market, I’ll be sharing a few posts on the psychology of trading. Hopefully you will find value in taking a step back with me and discovering, or rediscovering, the winning philosophies of traders past and present.

The reality of trading is no matter how awesome your trading system may work in theory, you still must execute with real cash on the line. If you clam up when experiencing a series of painful, losing trades—you must not waver. No trader wins all the time. Conversely, you must be careful to avoid taking profits too early on winning positions because you just KNOW the market will turn against you at any moment. I firmly believe a trader’s mindset is just as important as any other factor.

Trading is a process with parts science, math and art with a dash or two of luck. I’ve been trading for four years and I have had my share of ups and downs and can confess I’ve been guilty of breaking just about every trading rule ever put to paper.

I started this blog a month ago with the hope of sharing my insight with you, dear reader, and to learn from you too. I plan to keep the Rip City Trader alive for the foreseeable future to see where it takes us. I can’t wait to continue the journey.

Upon my return in mid-December, I’ll be back to curate my daily links and provide my thoughts and research on the futures markets I follow closely.

Happy Holidays!

Thursday Links: Bitcoin Labeled a Joke While Twitter Valued at $31 billion

Stories I’m reading today…

ECB cuts rates while US data surprises – gold is confused (Barron’s)

Bitcoin is a joke (BusinessInsider)

Twitter’s IPO happened today and it’s flying (TechCrunch)

Beans vs. corn: A look ahead to 2014 from Darin Newsom (DTN Progressive Farmer)

Lumber is up 15% year-over-year (Calculated Risk)

World food prices rise for first time since April (LiveMint)

Eye-opening piece on the underground market for rare Nike shoes and the NCAA (Stumptown Sports)

This week’s biggest football game is tonight: Oregon vs. Stanford (ESPN)

Welcome to the Rip City Trader Blog!

Hello and welcome to the Rip City Trader blog! This blog is primarily about the futures markets, though it also touches on broader market and economic themes with a mix of politics, culture, media and sports. I’ll share commentary on the markets as events unfold and point you to news sources, people and content I find interesting. I hope it challenges while inspiring you to take a fresh perspective on the markets and the broader world.

To help illustrate my perspectives, I’ll include stats, charts, research and links with a bit of snark and sarcasm. But keep in mind this blog is forecast free. Don’t expect financial advice or trade recommendations. Instead, simply sit back, read, share a comment and enjoy!

Who is the Rip City Trader?

My name is Keith Metz-Porozni and I am a Portland, Ore.-based hobbyist futures trader looking to share my perspective on trading futures. By day I am a communications pro looking for a new opportunity to provide effective public relations and communications support for a growing business in Portland. But by night, I’m all about the markets.

The name “Rip City” is in reference to a nickname for the city of Portland, first coined by the legendary Portland Trail Blazers’ play-by-play radio announcer Bill Shonely.

Want to connect with me? Follow me on Twitter @kmetzpor or fill out the contact form.

Happy Trading!