Commodity prices and the Dollar Index.

HDFC Bank bearish head and shoulder was discussed on August 19. That pattern has now been confirmed. See chart below.

Why do commodity prices rise when the dollar falls and vice versa?
consider a loaf of bread. costs one dollar. that one dollar is worth one dollar. it’s an even trade. “the dollar falls”. the dollar is now no longer worth a dollar. the bread is still worth the price of the dollar before it fell, so the price must be raised to compensate for the lower value of the dollar.

The Tragedy of Missing Out

This comes from the Zen Habits blog

A father and his son went fishing on a small boat, hungry.
The father helped his son reel in his first fish, and it was a beauty. “Great catch, son,” the father said.
“Yes, but I’m worried I’m missing out on better fish,” the son said. “What if I could catch a bigger, tastier fish?”
“Maybe you should try,” the father said.
And the son did, catching an even bigger fish an hour later. “A real beaut,” the father said.
“But what if there are better fish out there?” the son asked.
“Maybe you should try,” the father said.
And the son did, catching a bigger fish, then wondering if there were better fish, catching another, and so on.
At the end of the day, the son was exhausted. The father asked, “How did the fish taste?”
The son hesitated. “I’m not sure. I was so busy looking for better fish that I didn’t taste any of them.”
The father smiled contentedly, patted his belly. “Don’t worry. They were delicious.”
—
We are all of us like the son. We all worry, at some time or other, that we’re missing out on things.
……….(read the zen habits blog for the full post)
My Notes:
When we trade, we should focus on the patterns and securities that we are comfortable with. There is so much movement in the market, we cannot catch all of it. I am usually content with what I am doing. What about you?