Daily Archives: November 20, 2018

US Dollar Intraday Update: Is The Bottom In?

 

This morning the US dollar spiked to the downside and then instantly turned back up. Now we have to see if we keep getting higher lows, as that is one sign of a bullish phase cranking back up.

One thing I like to stress is that the commercial hedgers are net short by a wide margin, but I have also witnessed them make dramatic changes from one week to the next. Besides those commercials are net short in the precious metals which I think could have far more power than one single asset class. Commercial traders don’t have the same agenda as non-commercials do as they work inside or with the people closest to the industry.

Many Gold investors may wish and pray for the US dollar to implode but that is highly unlikely this time. The 2008 low in the US dollar was a.”Major” low that I documented very well. The US dollar also produced a giant falling wedge, about 23 years long. By itself, this type of wedge is extremely bullish, so it’s not just about any single wave count.

I spent years looking at the US dollar as a big bear market rally but every bearish wave count I came up with would never last for very long.

A new record high will help to confirm that the bullish scenario is alive and well!

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Palladium 1980-2018 Review

If you have never seen a wild and choppy bull market then here’s one. Not until I applied diagonal wave counting to all my commodities did this pattern make any sense. We just hit a new record high at about $1178, and Palladium has backed off a bit this morning since then.

All the peaks are connected with zigzags, except for the 2008 bottom which ended up being a running flat, with a near picture perfect zigzag crash into the 2003 bottom. From the 2008 bottom, another zigzag bull market developed with an expanded pattern for its “B” wave correction.

Any Cycle degree bear market will crush this Palladium chart and initially, Palladium could reach my previous “B” wave bottom in Intermediate degree. This would be close to the $832 price level, but it’s still not the end of any bear market.

I never apply conventional market correction calculations, as commodities are in a different world. Soaring to extremes and then crashing down to an extreme is pretty normal. Commodities are in a Submillennium degree wave 3 diagonal wave structure that started way back in the Little Ice Age.

It was the Roaring 1920’s when it all changed as that was the first time that ordinary investors got the investing bug and they also invented new types of assets during that time period. This is very obvious if you look at the charts before 1920.

Technically speaking, another zigzag should develop but it will be one degree higher as a zigzag in Primary degree.

Commercial hedgers are net short by a wide margin, which should start to turn as a Palladium bear market becomes more obvious to the talking heads.  It’s the non-commercial traders that always get caught in a trap as they seem to love chasing bull and bear markets.

 

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Mini SP500 2016-2018 Review

 

I’m sure the entire planet is trying to figure out how far or how deep this bear market will go. Most of the time markets will come to a grinding halt at some previous bull market support. In this case that would be the 2016 low. (2000-1800).

I will also keep my expanded pattern alive as it is already telling me that one day, all the markets that have this pattern will get retraced in another bull market, but it may take 10 years or more before a new record SP500 high will ever get recorded.

I have mentioned many times that all the President Trump market gains will burn up in a puff of electronic smoke.

From the 2016 bottom we had a 2-year run to complete a move in Intermediate degree, so when the market retraces back to those levels, they would have retraced an Intermediate degree move. Since it would end with a run of 5, I always have to cap it. If I see “any” 5th wave uncapped, then I know those wave counters don’t have a clue where they really are!

This would be the “A” wave in Primary degree and “A” waves are usually “Buy” signals, but they are not the starting waves of a new bull market.

Any “B” wave in Primary degree will also be very choppy, which will be the first clue that it’s just another bear market rally.

It may sound crazy that the SP500 will crash down to the 1800 price level, but we are dealing with a Cycle degree bear market, the likes we have not seen since the 2009 lows.

Tech companies inside the SP500 are imploding with Facebook, Apple, and Nvidia leading the way. This should not be a surprise to any serious market observer as this is starting to happen for the third time since the 2000 tech bubble. Three bull market peaks have blessed the smart market timer, but those party days are over, at least until after 2022.

Solar Cycle #25 should kick in so the younger investors will enjoy the power of the sun. In 2008 it was Solar Cycle #24 that kicked in and it supercharged the markets until January 2018.

The Gold/Sp500 ratio has changed little and is on the expensive side of 2.2:1.

Some say there is no place to hide from this turmoil, but we also “always” have a choice. Any investors that are getting close to retirement should be extra cautious, as my generation got hit hard, and escaping into cash would have at least saved some capital gains.

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