Weekly Commentary- Positioning for 2010-Pt 1

There has been talk of US markets now moving out of sync with the dollar, this however has proven premature and the inverse relationship between the two remains intact. The dollar will continue to strengthen throughout 2010. There are very strong technical reasons for this breakout, but the fundamental reasons are even more compelling. The dollar still remains as the standard of deferred payment for all international settlements. The insatiable desire of institutions, corporations, and countries to pay off their debt obligations will further fuel the demand for the dollar. Until the Bretton Woods system is changed this will continue to be the case, despite the actual demise of the value of the dollar in real terms. One way to play the rise in the dollar would be: (UUP). Over the next year gold will continue to retrace its most recent advance, potentially falling below $800 per ounce. One way to play the sell-off in gold is: (DZZ). Once this retracement is complete however, gold will continue its climb with the potential of making a substantially higher high...and ultimately we will head down the road to the retooling of Bretton Woods. -Dio.