US Dollar Intraday: Impending Correction?

This is just a quick update and may not last long enough before the digital paint even has a chance to dry.  There is a chance that a correction is still in progress and that the US dollar could make a deep decline this week.

Nothing but a 100% retracement would satisfy or help confirm the bearish wave count above. Any intraday decline of the USD could also send gold on a bullish move as fear attacks the stock bulls.  Any push to new US dollar record highs would send this wave count to the digital “Bone Yard” very quick.

I look for long spikes pointing down as they tend to be corrective “C” waves coming to an end.

 

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US Daily Chart Bull Market Update

In February 2018 the US dollar crash came to an end, which I believe to be the end of a correction in this ongoing bull market. The big US dollar bear market came to an end in 2008 when it exploded in price.

Many contrarians were warning us that the USD could turn very bullish as all the US dollar bears were in a massive bear trap.

2008 wasn’t just a temporary bottom it was a “Bear Mania” bottom.

I know there is no such thing, but I’m trying to make a strong point that “Manias” work both ways. 2008 was also a huge 23-year bear market bottom with the shape of a falling wedge.

Since then the USD has spawned a major bull market which could last decades but that will produce corrections that many believe will be the start of a new bear market.

On the daily chart above, the 2019 bullish US move has some wild moves in it that need more time to clear up. At this time I will count them as a diagonal wave structure.

I will not be a “Happy Wave Counting Camper” until the US dollar soars past the 103.650 price level, with 120 being the ultimate price target.

A month or so ago the commercial hedgers dumped massive amounts of long positions which did not support my bullish outlook anymore.

With the US in the largest trade war in its history, you would figure that the US dollar would implode. Last week commercials took away 1316 short positions and even added 233 contracts to their long positions. I see that as a bullish development and to some extent, supports my bullish wave counts.

The Smoot–Hawley Tariff Act signed in 1930 killed the stock market in 1929, but stocks have not reacted to our present trade war that much. How long that will last may just be the best guess scenario at this time.

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US Dollar Intraday Update

Markets can turn at the beginning, middle, or end of a month most of the time.  The USD had a bearish relapse this month but it looks like a corrective zigzag may have completed.

It also means that the USD can soar much higher.  The US dollar is in a bull market which started in 2008, but this bull market is also producing a large number of overlapping waves. which work best as diagonal waves.

The USD may not breakout and even give us another leg down but in the bigger picture, this US Dollar is in a bull market even though commercials are heavy net short.

Last week commercial net short positions had a ratio of 40:1, which I consider extreme. Having a bullish wave count with those conditions in place is like two cars playing “Chicken” on the freeway!  Last week the commercials added contracts to their long positions and took away 424 contracts from their short positions. This gives a clue that commercials had a bullish outlook last week!

It may be hard to realize but the USD has been in a major bull market since the 2008 bottom which I documented very well. The thing is the younger generation today has no clue how emotional that time period was.

Emotions of a herd only last for so long after which they disappear. It is the numbers and letters of the EWP that capture these emotions. You heard about the “Message in a Bottle”, well the EWP is all about “Emotions in a Bottle”.

Even with the trade war being in full swing, the USD keeps making bullish progress.

On the monthly charts, the golden cross has already happened, while on the weekly charts the moving averages are on the verge of creating another golden cross as well.  The moving averages are giving bullish signals so we have to see who wins by the end of this month.

The full moon is coming up this weekend, so that can produce a turning next week as well.

 

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Canadian Dollar Weekly Chart Update

Even though the commercial hedgers are net long the Canadian Dollar by a 2:1 ratio, I will keep working our CAD with a bearish outlook.  When the Canadian dollar hit its peak in 2011 its price was repelled to the downside with the first peak in solar cycle 24. Many other commodities also imploded notably all gold related assets.

This provided the push to the 2016 bottom, after which the CAD exploded violently. Not just once but twice with the same looking pattern.

This all can be taken as a bullish sign, but I see an inverted zigzag which has not completed. From the 2017 peak, the CAD has declined with overlapping waves, which helps in thinking we are in a 5th wave decline.

To help confirm that the CAD is still in a bear market rally, the 73 cent price level will not hold, and at best we will get a huge double bottom at the 68 cent price level.  This may take until late 2020 to play out but by then we could see the arrival of solar cycle 25.

The world is in a war against the use of fossil fuels, the likes we have never experienced before. In the last 2-3 years, the language has changed to the “War On Climate Change”. Global warming wording has disappeared from mainstream media headlines, replaced by just “Climate Change”.

The world is all in a panic to stop the climate from changing, which is actually a war on our sun!  Good luck with that folks, as I have never seen anyone win betting against the sun.

We may still get a bullish push with the CAD but in the near term, support will not hold.

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Euro 2000-2019 Review

 

When the Euro hit a major bottom in 2000 it coincided well with the peak of solar cycle 23. The Euro was repelled to the upside during the entire length of the down phase of solar cycle 23.  The Euro gave us close to a 9 year bullish phase which “Coincidently” ended in early 2009.  After 2009 the Euro started a bearish decline which coincided with the two peaks of solar cycle 24. (2011 and 2014) The decline of solar cycle 24 repelled the Euro to the downside or another way of looking at it is that the solar cycle is drawing prices to it like a magnet.

I would expect that the upswing of solar cycle 25 could send the Euro into another bullish phase, which still may take until late 2020 before that happens. It’s great for longer cycles but in the short term, a 5 wave sequence still seems to be rolling along.

I would be bullish as well if a long spike developed to the downside, which has not happened yet.

The commercials are betting on the bearish trend to continue as we can see they have now built up a very strong net long position. Of course, the speculators have gone the opposite direction as they have a bearish outlook for the Euro.

Any bearish wave count supports the speculators, but both parties can’t be right at the same time.

The gold bugs need for the Euro to explode, as it is in the USD basket and acts inverse to the USD.

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US Dollar Intraday Bull Market Update

After a stunning run, the US dollar has started to back-off again.  In my last update I had the US dollar in a diagonal wave count, but this time I looked for a cleaner impulse. The top trend line is based on the bottom support line, so the US dollar was still a bit shy of hitting it.

I think the USD is still in a bullish phase but corrections can seem like the return of the USD bear. The commercial hedgers have net short bearish positions, so any bullish wave count I have is fighting headwinds.

Of course, hedgers can change positions very fast, but we have to wait until Friday’s COT reports come out.

I wouldn’t want to see the US dollar slice through the bottom trend line, but it’s impossible to catch surprise moves most of the time.

 

 

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Canadian Dollar Daily Chart Bearish Update

It’s understandable that our Canadian dollar is taking a beating as another move south happened during the night. Our great visionary leaders creating the economic civil war on fossil fuels here in Canada is to blame.

Since the September 2017 wave 4 peaks the Canadian dollar has been in a steady bearish decline that is not a pure impulse, but a diagonal impulse as it is still a set of 5 waves.  It may sound silly or stupid but you could label this same daily chart 3-4 different ways.

A triangle (ABCDE) wave count would work as well as (WXYXZ).  The difference is that only one can travel to new record lows while the triangle and  (WXYXZ) can’t.

The January 2019 low is the low to beat, but the 68 cent price low would be ideal.  The commercial hedgers are still net long by a ratio of more than 2:1 and last week they added more long positions.

The speculators see the opposite as they are bearish by more than a 3:1 ratio. Both groups can’t be right in their directions so sooner or later one group will be proven wrong.  When one group realizes they are wrong, it can cause a mini panic.

Even then it doesn’t mean a major reversal of our CAD is guaranteed. The first low to beat would be the .732 cent price level with .68 cents being the ultimate goal.

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US Dollar Intraday Bullish Move Update

In the last few weeks and the turmoil in world events, the US dollar is very close to making new record bullish highs. This 97.100 price range is also producing potential resistance.  Will the USD keep on soaring or will it implode due to all the stories about how Russia, China, and Iran are buying gold to destroy the US dollar!  They can’t be buying gold, or they have stopped buying gold because gold has been crashing as the US dollar is soaring.

I won’t repeat any of the fundamentals as thousands of analysts have got that covered. I look at the COT reports and a month or so ago, the commercial hedgers removed a “Large” amount of long positions, with last weeks positions creating a net short ratio of 48.36:1.  In other words, commercial hedgers are bearish by a wide margin, but yet the USD is still going for record highs.

Looking for a bullish wave count under those conditions is like playing “Elliott Wave Count Chicken”, so how long this bullish push will keep going is a good guess at best.

The vertical spike last night would be enough for me to turn very bearish on the USD, but I can still see bullish wave counts developing.

Gold is reacting to the US dollar rally as expected, but its decline will also stop dead and reverse once the USD starts on a much bigger correction.

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US Dollar Intraday Bullish Phase Update.

On the 12th of April, the US dollar index seemed to have made a good bottom which may be the 4th wave of Minuette degree. It could take the rest of the month to play out but the full moon this Friday may change all that.

Looking for a bullish wave count in a world that is trying to kill the US dollar seems futile at best but that’s what markets do, as they act the opposite of what the majority always expect. Against all odds, the USD has turned bullish. Any 5th wave can extend blasting to new record highs and I’m sure we will get a heavy dose of diagonal wave structures as well.

It would be nice to see the USD above 97.700 but that could just be wishful thinking at this time. The commercials are not on the bullish side so any bullish wave count I have technically should not work.

 

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US Dollar Daily Chart Bullish Gyrations Update

In bear markets, it gets ugly as all the bad fundamental news become front page blog news. There is also a whole lot less cooperation as deals fall apart or governments make wild moves that reverberate around the world. It’s a mixed bag of news so the fundamentalists are getting conflicting news.

Yet with all that, the US dollar doesn’t want to die but is still making bullish progress. I stayed with my 4th wave bottom but the 5th wave could also be another zigzag. I have a set of overlapping waves that defies description except a diagonal. I have also seen these “C” waves explode and extend that also defies logic but happens regularly.

One reason the USD has not died just yet is that it is in a much bigger bull market than many of us do not understand.  It is also the main reason why gold and silver continue to underperform.

This is last Friday’s USD COT report and something wild did happen that was a rather rare event and that was that the commercial hedgers removed a big amount of long positions when they were net short already.

This turned into a 41.8:1 net short position which is a huge jump I have seen in all the years looking at COT reports.  It also puts my bullish wave count at odds with the commercials,  like I’m playing “Chicken” with who turns first.

I could see it if a big vertical spike was developing, but we’ve only had small spikes since early 2018.

Yes, the USD could make a sudden move south but with this pattern, it’s much harder to tell.

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Euro Weekly Chart Review

The Euro took a dip during the night further confirming a bearish mindset. I’m not exactly happy with this wave count as there is a bit of conflict here as the COT reports still have commercials being net long. Any big changes in COT positions are not posted yet. It takes the Saturday to look it all over for any changes. The USD acted bullish at the same time and gold pushed to $1320 before it backed off.

This short term Euro plunge could lead into a long spike which increases the chances a longer reversal is comming.

During the 2018 bearish phase, the Euro was extremely choppy which are classic diagonal wave structures, and they are still acting that way.

The golden cross is still in effect but that may not last too much longer after the 200-day MA gets sliced in two.

Brexit woes continue and survival of the Eurozone is also at risk as democratic countries are under constant threat of cyber attacks and debt traps.

Even though the Euro looks very bearish we should be very vigil for an unxepected reversal.

 

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US Dollar Daily Chart Review

From this perspective, I can sure show you a very bearish US dollar pattern as I have a group of overlapping waves that can’t make fit.  With a potential wedge and the right shoulder, the US dollar sure looks bearish. At least in the short term. The right shoulder will not hold if the USD is in a bigger bullish phase.

Tomorrow is also the full moon which can produce some amazing reversals but many turnings also happen closer to the end of a month, so the USD can remain bearish for another couple of weeks.

Commercials support a bearish stance right now, as they are net short by a margin of 10.9:1. Of course, the speculators have been chasing the US dollar bullish phase but their net long ratio would shrink as the US dollar declines some more.

A price drops down to the 94 price level would be one of my choices which would trash the bottom support line as well.

In the short term I’m bearish but longer term the US dollar could be in a bigger bull market that very few of us are expecting.  In 2008 the entire planet hated the US dollar, but yet look what happened! The US dollar soared while gold crashed a couple of hundred dollars. The USD has a 26-year falling wedge which can produce super bullish phases.

 

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Euro Intraday Downside Breakout Review

Has the Euro rally gone far enough? Just like the USD, we are dealing with a potential expanded pattern, except the trend is going the opposite way. Even though commercials are net long, they are not net long by very much just yet. This bearish phase is not starting to hit major COT resistance.

In some respect my wave counts are playing, “Chicken” with the COT reports and it’s just a matter time to see who blinks first!

The 4th wave rally in Minor degree ended at the top left of this chart and a full set of 5 waves in Minute degree still have to play out. Even though the decline looks stunted, it can extend dramatically when we least expect it.  Any move below the 1.120 price level will certainly confirm that this present rally is still a bear market rally.

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US Dollar Intraday Bull Market Update.

Some investors are looking for the US dollar to imploded due to the massive printing program they have done over the decades. Back in 2008, this bearish mania was at its record low from its 1985 peak. We were all warned over and over to get into gold and out of the US dollar, yet what happened was the exact opposite. Back in 2008 the USD exploded and has been in a bull market ever since.

This intraday chart is just a very small time period of this bull market, part of a 5 wave run in Minor degree. The 4th wave sure looks like it ended in January as the second low was a higher corrective low. The late January crash has been retraced, and at this time the USD sure seems like it wants to keep heading higher.

It would be nice to think that another wave 1 peak has completed in Minuette degree, but the commercials are still building bearish positions.

I would be very bearish on the US dollar but usually, any asset class will start to “Act” funny, before it reverses any strong trend, which the US dollar has not created just yet.  The Euro and our CAD have also made some bearish moves which should happen as they act inversely inside the US dollar basket.

I would love to see the US dollar break above the 97.711 price level as that would establish a new 2019 record high.

 

At this time the commercials have a net short ratio of 7.29:1 which is on the extreme side. I’ve seen worse so this can keep going for many weeks.  The speculators removed 1659 contracts of their long positions which means they got scared. Another way of looking at this is that my bullish wave count is playing “Chicken” with the commercials at this time. One thing that has not happened as well, is a strong vertical spike in the daily, weekly or monthly charts.

On the daily chart, the USD has found support at the 200-day MA and is still under the influence of a Golden Cross.

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British Pound 1985-2019 Review

 

If we look back to 1985 there should be no doubt that we can see that the British Pound had a huge single spike to the downside. 1985 was an important year for many of the currencies to make major turnings. All the currencies inside the USD index act inversely, so our wave counts have to do the same thing.  Thinking upside down with the wave principle has to be pretty normal if we want a decent wave count.  The last thing I have is a decent GBP wave count.  What I want and what the market is going to give me are two different things. If the GBP gets close to the 1985 bottom will it be at a Cycle degree wave 5 bottom?  I have my doubts at this time as the 2009 bottom may be the “A” wave in Primary degree location as well.

If a new low is going to happen then a plunging zigzag could be in progress. Below the commercials have been switching to the bullish side, while the speculators have done the opposite. Speculators are believing the bearish fundamental news, as they think this bearish trend is going to continue.

All fundamentals come in the form of “news” as the government shutdown clearly demonstrated to me.

 

These visual COT reports give us an idea as shorts and longs are clearly visible. The red lines are the long positions so I would be hesitant to take any position in the short term. Brexit remains the problem and until that gets resolved the GBP could be stuck in no man’s land for a little while longer.

Last week I still received one more Market Vane sentiment report that ranged between 34%-40% bulls, which are not some readings I can jump up and down about. Now if there were only 14% bulls in the survey, then that would be a different story.  I refuse to give any long drawn out fundamental commentary as 1000’s of other analysts are paid full time to do that. Every time the GBP makes a move analysts will jump in and find you a reason why it moved.

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Euro Monthly Chart Update

 

I’m sure the Eurozone is going to be bogged down with all sorts of fundamental problems which we here or read in the news.  The short version is “I don’t do fundamentals.”  Besides that, I don’t think a single analyst can give me a fundamental reason for each Intermediate degree or higher turning.  Forecasting a price crash to come, we know fundamentals will change, so does technical analysis change the fundamentals?

Just like the USD trend is up, the Euro is going the opposite way. Both these currencies need to travel the opposite way in order for gold to soar like they all say it will. After all gold is in a bull market right?  Since the 2008 peak, the Euro had 6 major bullish phases which all were completely retrace except for our present Euro rally.  Do you know how bullish everyone was on the Euro in 2008, yet the Euro turned and crashed?

2008 was also an important year as oil crashed as well.

Fundamentals are lagging indicators, and they mean little after every analyst on the planet is spouting the same gibberish.

Yes, the commercials are net long with their Euro positions, but they removed 5105 long contracts during the shutdown.  The speculators are bearish and last week they turned bullish as they added 9,229 contracts last week.

 

The COT report is a mixed bag and when there are no real extreme readings then I rely on my trend to give us a clue. I see the trend is still down on this monthly and even weekly charts. The wave 3-4 rally has an expanded pattern in it, which means a complete retracement to a new record low should happen. There are many expanded patterns that develop and to not look for them, will always give us a surprise.

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US Dollar Intraday Double Top!

Before the digital ink even dried from my previous US dollar posting, we just hit a double top this morning to within .003 of a point.  Now we have to wait and see if this is a bullish H&S or a bearish one.  I still have 3 degrees left but we may be close to a wave 4 type of correction.  I may also be jumping the gun here, as just a small spike has developed. This entire bullish phase has been running since the January 10th bottom with the February low being the secondary bottom as a higher low. I believe the US dollar is in a much bigger bull market than most of us expect, but where we are in this bull market is always the task at hand. The US dollar turned very bullish in 2008 and since then has been in a 5 wave run in Primary degree.

The Euro took a hit, as well as the other 5 in the USD basket!

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US Dollar Intraday Crash Update

News of a truce in the shut-down wars, forced a reaction from gold, while the US dollar imploded. The Euro and the CAD also reacted on Friday.  It looks like the US dollar is going to keep heading south, but this could also be just another correction.  We only have about 5 more trading days until the end of January after which the US dollar can add another leg up.  Above all, and to help confirm another bullish leg up, this US dollar chart can’t crash below the January 10th low of about 95.050. Besides a few “flash” type moves the markets have been pretty boring, but with the government ready to publish some economic data in the next few weeks, all hell could break lose.

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My updates are going to be sporadic in the next few weeks and months. I will put up a permanent page posting when I have more information.

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Euro Daily Chart Review

At this time I will keep counting like the January/February 2018 peak is a 4th wave peak. During the last 8-9 months, the EURO pattern produced a choppy pattern that contains an expanded pattern in a 4th wave position.  Since November 2018 the EURO rally was also very choppy which fits a bear market rally very well.  I can’t create a set of clean 5 waves up, so the EURO has the best chance of completely retracing its bearish rally.  All the experts in the world will give you reasons why the EURO goes up and down. I don’t need to regurgitate all the fundamental reasons for the EUROs up and down action because you can’t trade on fundamental reasons that change like the wind.

The bottom trend line would be an early warning that the bearish run is over but we have to keep alternates handy just in case.

 

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Canadian Dollar Weekly Chart Update.

Since the 2011 peak when all the experts were bullish on our Canadian Dollar, it turned and started to crash. Our CAD started a bearish trend that still has not finished. The 2011 peak matched the gold&silver peak as well so when the CAD crashed so did gold stock related asset classes. Since 2011 each counter rally has proven to be a bear market rally as record lows were continuously broken.

Since the 2016 bottom, the experts claim that the CAD is back in a bull market. From the December 2018 low our CAD exploded which really got the CAD bulls all excited again. The thing is no new record lows have been produced which has to happen for the markets to confirm a bear market rally is still in progress.  On this chart, the .68 cent price level would certainly confirm that a bear market rally has taken place.  Since the 2017 peak, the CAD declined in a choppy fashion which fits best as a diagonal set of 5 waves down.

None of the COT reports are of any use until the US government shutdown is resolved and even then we may get a surprise or two with a potential “COT Shock”.  As much as I’m still bearish on the CAD it doesn’t mean it will stop on a dime and head south again.

This sideways move has also produced a Golden Cross but now the  “Death Cross” is clearly visible. The CAD would have to switch back to a Golden Cross in order for the bullish leg to keep going.

 

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US Dollar Weekly Chart Review

Since the 2011 bottom, the USD turned bullish again which also matched the stock market bottoms of 2011. Stocks soared and gold-related assets started a major bear market.  I believe the bull market in the USD has a long way to go, but where we are in this bullish phase is the challenge we face. The COT reports are useless due to the government shutdown but my last readings from Dec, 20th the commercial speculators were very bearish.  This is a very bearish sign for the US dollar but the commercials were also very bearish on, silver, Gold, aluminum, palladium, and platinum.

During the late 2018 peak the US dollar produced a very complex pattern that may have finished on January 10 2019. During this USD decline gold gave us an impressive performance that has many convinced gold is going way above $1400.

The US dollar is on a 5 wave run in Primary degree. Take the Euro and invert it, and it would just about look like the US dollar. Only time will tell if the USD has bottomed but eventually the USD should go well above the 104 price level.

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USD Index From A Bear To A Bull in 23 Years: 1985-2008 Review

 

From the February 1985 peak (164.720) the US dollar index started a meltdown that should have sent gold soaring. By the time the USD hit this peak gold already had crashed. In 1992 the US hit another record bottom that I can only count as a diagonal wave structure. Another fast move up and then down again producing a higher low, which is a sign of a bullish move still to come. This move had 5 waves in it alright, but only in Minor degree. The entire USD bullish move was coming to an end and the gold price was crushed at $252 in August of 1999!

From this 2001 US dollar peak, the bearish move resumed, driving the gold price and the oil price with it. By March 2008 the US Dollar was coming to a major bottom that many of the good contrarians of the day saw coming. The 2008 bottom was a Cycle degree wave 4 low. It was not some little bottom in an on-going bear market. Everybody on the planet hated the US dollar at that time, and a panic into gold started to pick up speed.

It was oil that crashed in 2008, 3 years before gold. Since the 2008 bottom, I counted the US dollar as a bear market rally which proved futile forcing a review looking for a much bigger bullish move.

The big top declining trend line has now been broken also signaling a bigger bullish move still to come. Another indicator that a huge US dollar bull market is still in progress is that falling wedge we see.  For most of 2018 the trade war rhetoric has been flying all around the world and yet the US dollar was in a rally the entire time.

Now that the Fed has given the green light, investors jumped back into the stock markets again. Shouldn’t the US dollar keep soaring if trade war peace is being declared at the G20 meeting? With tensions around the trade issue being reduced there would be no need to hold gold as a hedge. Commercial traders are already net short by a wide margin and it will be interesting to see if they close off their short positions with this Fridays COT report.

Longer term the US dollar looks like a run of 5 waves in Primary degree is in effect, and the 89 price level is the start of the 5th wave in Intermediate degree.

Understanding the US dollar bull market is critical as this is not a short-term bullish blip on the charts, not by a long shot. Recently the US dollar has made some moves that could still be bearish which may support the gold price this week.

There are three main prices that should get retraced and the first near-term price target is 103.800. The 121 price level is next which could take a few years before it gets hit!

The real threat is deflation, which has more to do with demographics or the world birthrate crash than a good stock market.

 

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US Dollar Daily Chart Bullish Update

 

One of the reasons why gold is not really soaring in price is because the US dollar is in a bull market, and not in a bear market rally. Sure, we will see the US dollar tumble, but that will happen during a bigger degree of a correction. The US dollar started getting a bit more choppy recently which can mean a correction is still in progress. The US dollar can still take another dip to the downside before it resumes its bullish trend.

Waiting for the US dollar to turn into an extended bear market is not going to happen at this time, even though commercial hedgers are in net short positions already. The commercial traders do not confirm bullish COT positions in gold or silver, so I’m pretty confident gold and silver will still act rather subdued in the near term.

Longer-term, the US dollar will soar above the 103.820 price level which would be another all-time record high since the major 2008 bottom. Wishing for a 2001-2008 like US dollar decline is just wishful thinking because there is no room on the charts for that to happen. The Euro is inverse to the US dollar and I’m sure it’s not going to jump out of the USD basket today or tomorrow. This trade war thing started well before President Trump got into power, so you can’t blame all market woes on President Trump. The massive debt bubble that China is creating has been bursting which makes the US dollar the go-to currency of the world.

Have you noticed how fast GM shut down production in Canada and the USA? It’s more a snub towards President Trump as I’m sure any plants outside the US or Canada will be the last to shut down.

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US Dollar Intraday Bull Market Update.

 

When I see this US dollar chart, it sure looks like a bullish move to me.  Even with all the Trump rhetoric, the US dollar is taking it in stride. I’m starting to push my degree levels to the point I may run out.  When that happens then a bigger review will need to be done. The US dollar has demonstrated to me that it remains in a bullish trend, which started way back in 2008!  It may take the rest of the week or longer, but the USD should show us new record highs.

Anything above the 104 price level could be the setup for a major USD reversal. All other currencies inside the US dollar basket should react positively as well. One way to look at it is that we include gold inside this basket, as it acts inverse to the US dollar very well. Demographics is the main driver of the US dollar as very few even look at the generational impact of the aging boomers.

Breaking out over 97.700 would be the first hurdle to cross, but an impending small double top could put up a good fight. Some analysts are saying that 2019 could be very positive for gold and I see no problem with that, but I would like to see my wave count of wave 3 in Primary degree start to arrive first.

 

 

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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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FXB: Invesco Currency Shares British Pound Sterling Trust (ETF)

This FXB chart is an ETF that seems to act very well to the regular futures charts I use. There are little differences but not enough to impact major changes from the British Pound futures charts.

The big thing is that this ETF follows as close as possible to the futures charts, not like all those leveraged funds do. It also shows the late 2007 peak which matches the oil peak. Markets started to crash 2007-8 and this ETF crashed right along with the stock markets as well. Gold also imploded as the US dollar exploded in price from 2007 to 2009.

For well over 5 years the FXB went sideways with many rallies and crashes. From 2009 to 2014 that sideways market has been confirmed to be just a big bear market rally as the 2016-2017 crash bottom, completely retracing back to the start of origin, which was the early 2009 bottom.

When some gold experts tell me some forecast where the FXB is going to jump out of the US dollar basket, then they are forgetting the inverse relationship that’s always present

That brings us to our November 16th bottom as I was bullish but it is not responding as bullish as it should, so I have to look at this as a good chance that more downside is still to come.

There is so little price cushion to spare, so any day next week we could see support just melt away!

There could be a new downside to come and it will not be the over or end until a new BP record low is achieved. The way I see it at this time is that the British Pound can land at the same Primary degree “A” wave bottom as all the USA stock indices, silver, Cad, Euro, and gold. I’m sure there are a few more I missed to mention. It’s not about one asset class that may turn, it’s the majority as they are all connected.

In the long run, the BP could be a flat and this bear market is just the zigzag intro. We could get another zigzag bullish phase but once that has been completed, the 5 waves down in Intermediate degree show happen. That’s one thing zigzags and flats have in common they have same 5 waves down their “C” wave slope.

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British Pound Crash Update!

All this looks very bearish as the British Pound futures imploded this morning again. Sure the GBP can still crash and if this is just a bear market rally, then the 2017 bottom will never hold. The commercials do not support the public bearish view as they have very large long positions open with the GBP.

It would be something if the pattern is a 1-2, 1-2, 1-2 wave count. This wave pattern can produce an impulse move that is pretty rare and one more small 1-2 wave structure should appear. 3 sets of 1-2 wave counts after the wave 2 in Intermediate, is about the maximum that we can see, as they will be pretty small after Minuette degree. Either way betting against the commercial hedgers is a futile activity, as it would only give out short-term gains at best.

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US Dollar Intraday Bullish Review!

The US dollar may not be finished just yet, as one more plunge can also still happen. The small open gap is now closed off and a small H&S pattern is also forming. Higher lows is a sign of a bull market, and so far the US dollar index is still creating them. The idea that the US dollar is in a bull market sounds impossible to comprehend by many, but everybody on the planet hated the US dollar in 2008 but yet the US dollar turned and then soared. I spent years counting the US rally as a bear market rally, but my wave counts were trashed many times.

2008 was such an extreme bottom for US dollar which most people are not aware of.  I remember it very well as I had the USD 2008 bottom extremely well documented. 2008 was also the ending of a huge falling wedge, which if they are ignored can produce very violent reversals. We are getting close to a 10-year US dollar bull market where 5 waves up in Primary degree are in effect. Wave 3 in Primary degree would still be in our future as that would represent the increasing “Buying Power” of the US dollar. The Fed action of raising rates is draining liquidity out of the markets which is exactly what raising rates are designed to do in the first place. When markets crash then trillions of dollars will go up in smoke in rapid fashion.

At that rate, money will be destroyed and it would take a 2000 horsepower turbocharged engine driving the printing presses to build it all backup!  When the world is choking on debt then no matter how low rates may go they no longer have the stomach to take on more debt.

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US Dollar Bull Market Correction Update

Since the top of the September in stocks, this US dollar chart has also been on a bullish phase that the contrarians said will never happen. Well this USD bull market just keeps on going, and going  even though the commercials were net short by a large margin. I was pleasantly surprised last week as the commercials added to the bullish side and they removed  some contracts from the bearish side.  The 2008 bottom with the USD was an extreme the likes that only comes along once every 30 years. The USD bull market is only 10 years old, but it sure looks like it’s running a set of 5 waves in Primary degree. Wave 3 in the Primary degree is still ahead of us. Wave 3 peak would coincide with my “A” wave bottom in my Gold wave counts.

This correction could still make some twists and turns as this correction may not be finished today.

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Canadian Dollar Daily Chart Update

 

With COT charts like this, we just look at what is above and below the line and by the looks of it, there seems to be little interest on the commercial hedger’s side to build long positions. I’d rather see extremes first before I turn into a CAD bull and so far we are far from it.

Since the 2017 peak our CAD has been grinding down and all the gold investors need for our Canadian Dollar to soar!  That has not happened, and it even seems like a new record low is still to materialize. From July to about September the CAD was on a rally with some insane overlapping wave structures. Short term Bear market rallies behave just like this and “ALL” bear market rallies retrace themselves sooner or later. This small bear market rally will be retracted when the CAD hits below that .75 price level.

What the public calls a bull or bear market is not even close to what I use as we can get a 61% correction in a wave 2, and get a 40% decline for a 4th wave bottom. I’m sure nobody called the end to the CAD bear market rally in 2017, but we know the majority were all very bullish. Since the 2017 peak two support price levels are retraced and now we are going to face the 3rd one in a few weeks or so.

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