Dollar in steady decline

The federal reserve's goal of depreciating the dollar to reduce the true value of the federal government's debts is working. The US Dollar ($USD) has just closed at multi-year lows (75.61). The next level of support is @ 74 hit in November 2009. Thereafter, the all-time low around 72 hit in June 2008 is in sights. I expect that we will at least test both levels before the end of the Fed's QE2.

Meanwhile, we've begun to see bonds not behave as traditional safe havens -- by not rallying during crisis times and in some cases even selling off. While treasuries rallied a bit this week, overall yields are higher now than they were at the beginning of the year.

The Ultrashort 20year bond fund (TBT) is a great way to play this, with a stop slightly below $35. I also continue to love $GOLD and gold miners as with the currency being devalued, Gold will be a big beneficiary.

Losers

Sold SDS for an 8% loss and finally threw in the towel on PPL Corp (PPL) for a 20% loss (inclusive of dividends). Will rotate into more XLU.

New purchases

Adding to long term long positions, both good dividend yielders.

Added 200 shares of Intel (INTC) to the existing 100, @ $20.

Added 100 shares of Norfolk Southern (NSC) @ $66.

Looking to make a splash with MOS or MON if the rally continues tomorrow.

Japanese economy in freefall

And so is the Yen. Yen making all time highs against the dollar, now below 77. Amazing. This is the final throws before the epic yen collapse. The yen, very soon, will be the short of a lifetime. Just not yet.

Incidentally, all foreign exchange desks are going to BLOW UP over this, which could cause additional liquidations from margin.

Buy when there is blood in the streets

Bought 200 MSCI Japan ETF (EWJ) shares @ $9.36. Bought 100 Potash (POT) shares @ $53.20. Bought 100 Freeport-Mcmoran (FCX) shares @ $48. Bought 300 Yamana Gold (AUY) @ $12.05

Inverse H&S on the Junior Gold Miners (GDXJ)

The Junior Gold Miners appear to have carved out a nice inverted Head & Shoulders pattern on the daily chart, with the neckline at roughly 40 and the head at 33. This would indicate a pattern completion around $47, or roughly 20% higher from today's close.