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Category Archives: CURRENCIES

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!

Hits: 0

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.

Hits: 5

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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Euro Daily Chart: Death Cross Review!

 

This is the Euro daily chart which had its last major peak February, 16th, 2018 at the 1.22 price level. Since then the Euro is showing its bearish side as the Euro slides and creates a Death Cross as well. A Death Cross is about as bearish of a situation that we can run into, but most analysts ignore them.

On the weekly chart settings, the Euro is sitting close to the 200-day MA and has dropped below it a bit.

I’m sure analysts will not be screaming, “20%”, bear market territory anytime soon, because the Euro bear market started back in 2008, about 10 years ago. 2008 was also the oil bubble peak!

Any Euro wave count is basically an inverted version of the USD, and early this morning Euro support crumbled sending the Euro to a new bearish low. I will be the last guy to tell you where support is because you also have to ask support for what? Is the Euro going to pull off a miracle turning on some bullish news flash? News can give us short-term moves, but it takes much more than just some fundamental news report to turn a trend.

Trying to stop a trend with a news release is like trying to stop a semi truck by jumping in front of it with a big flash card! The COT report below shows little interest in building long positions on the commercial hedger’s side. The 1.03 price level can give us support, but that may just be the 4th wave support which I’m looking for.

Remember, all those gold bull investors foaming at the mouth? They need the Euro to sail north, not south like it has been doing.

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US Dollar Scores Another Bull Market High!

 

The last post I showed that the US dollar was in a correction. This has now been confirmed with the US dollar completely retracing the zigzag and pushing to a new high. I’ve made some wave position adjustments with wave 1 in Minor degree already being completed, and another 1-2, 1-2,  impulse type waves could be in play. Tonight the US dollar has gone vertical, even leaving a small open gap in its wake.

There can be a fast correction by closing the gap and then resuming its bullish trend. The intraday price action is not acting like a bear would as we keep getting higher lows and higher highs as well. This price action came with the commercials already having large net short positions in the US dollar, and to make matters worse, they added long positions last week. Even the commercial hedgers turned bearish on silver, gold, platinum, and palladium last week as their short bets also increased.

The Euro and our CAD also reacted by going down, so all this does not support a gold bull market anytime soon.

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British Pound Weekly Chart Bullish Update

 

When markets go down, bearish fundamental stories come out. I look at it from a contrary perspective and when I read bearish stories on the British Pound, I quickly flip to the COT reports to see if the COT report supports any of the bearish rhetoric. Take a quick look below and as the commercial traders see a rosy picture, while the speculators follow the crowd and believe the bearish BS!  In early 2017 the British Pound hit a major bottom and has since been holding. It sure looks like a wave 2 correction has completed, with the next wave 1-2 also completed.

This is also where I use the 1-2 wave count and since I’m at an Intermediate degree bottom, I can only have 2 lower degree extensions. It might be a bit early for Minor degree wave 1-2 to be completed, but that can be easily adjusted.  I’m sure some diagonal wave structures will be thrown in to keep us guessing, but when this bullish phase does something different, it will force a review each and every time.

 

This is the simple British Pind COT report where  the commercials sure are looking bullish to me. Those are net long positions, while the speculators are bearish. Speculators are chasing the perceived trend and always get into a trap. Look into the past and we can see major shifts in positions and I would not look for a bearish wave count until the commercials start to turn net short again, or at least close to it. Are the COT reports classified as “Fundamentals”?  With the EWP, all sentiment readings are important as they make charts go up and down.

The mainstream media always quote the speculators like they are the experts, but the commercial hedgers are a different group, as they deal more with people closest to the industry.

To help confirm this bullish trend, then higher highs, and higher lows must form.

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US Dollar Daily Chart Bullish Update!

 

This US dollar index has just pushed to a new record high this morning! This is not what the Gold experts want, as a rising dollar is not good for gold which has now responded with a price crash of $38! My Market Vane Report shows that about 74% of the traders are in a bullish mood. This is pretty decent but this not at a wild extreme just yet.  Even the commercial hedgers were net long with last Friday’s report, but they can switch just as fast.

I think the US dollar is in a bigger bull market than we can all imagine at this time.  At this time I’m counting the entire US bullish move that started in 2008, as a single diagonal wave structure, which allows for overlapping wave structures. As the US dollar poke higher, we can check the Euro and see that it is plunging. There are a few other currencies that travel inversely to the US dollar and our CAD is also on that list of 6 currencies.  The Australian dollar is not on that list but runs inversely to the US dollar as well.

In order for this rally to be a bear market rally, then 8 months of bullish action must get retraced!  This is not going to happen this year or even a decade from now.  To confirm that the USD is in a bigger bull market than what investors realize, it has to break out and create a  new record high. This high was in December 2016 at the 103.600 price level.

Just eyeballing the weekly charts, we are close to about halfway to this target.

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Euro Weekly Chart Bearish Update

 

When we look at a longer-term weekly Euro chart, I see a bearish trend still bouncing off two parallel trend lines. My main change is that I switched back to making the 2018 peak the 4th wave in Intermediate degree.  The Euro is inside the US dollar basket, and you can’t separate the Euro from the US dollar. The Euro has been “melting” down since the 2008 peak so why should it suddenly stop its bearish trend, and turn and fly north? Many countries under the Euro have serious issues as now they start to blame everyone and anyone for their troubles.

The Euro is just down 1/3 of the wave from the top trend line, which I call “no man’s land”. It may take a few more years, but the Euro should hit a new record low by 2022.

Today is also the 1987 stock market crash anniversary date, 31 years ago.  2008 was a major Cycle degree wave 4 peak, which matched the crude oil top as well. 2008 was also the start of solar cycle #24. There were two solar cycle peaks, in 2011 and a secondary peak in 2014. Each time the Euro repelled to the downside from these solar cycle peaks, but in the next few years, solar cycle #24 is coming to an end! My bet is that the Euro will repel to the upside along with solar cycle #25. Analysts will come up with all sorts of different reasons why the Euro goes up and down.

You read 5 Euro analysts updates, you can find a different fundamental reason as well. For gold investors, they need the Euro to soar, which in turn should crash the US dollar. This is not happening as the US dollar keeps displaying its bullish behavior.

On the smaller scale, the Euro and the US dollar both displayed a Minute degree triangle 4th wave, so that is also an indicator that I must up my degree level by a minimum of 1 degree, but many times there are two-degree level changes that have to be made.

 

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US Dollar Intraday Update

 

This morning the US dollar spike to the downside and then reversed quickly. The Euro did the same thing except the Euro is inverse to the US dollar. Calling for a massive gold bull market just doesn’t fit well if the US dollar is on a bullish reversal. Any sustained bullish move in gold will not happen if the US dollar is in a big bull market that nobody is talking about. Analysts think that the Euro is better than the US dollar when they are bullish on gold, but I don’t see it that way.

The Commercial hedgers are skewed to the bearish side of the US dollar by a wide margin, but the Euro does not confirm it. In a wild move, COT reports can shift very fast, as they can add 10,000 long contracts and at the same time 10-15,000 short contracts get removed.

What many do not understand is that the 2008 bottom of the US dollar was a “major” bear market low, which had its beginnings in 1985! This 23-year bear market was just a correction to an even bigger bull market still in progress.

2008 gave us a Cycle degree 4th wave bottom, which should never get completely retraced. Back in those days, the US dollar bearish mood was relentless and intense. The majority of analysts got fooled by that bottom, just like they were fooled by the Euro peak.

 

 

 

 

 

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Canadian Dollar Weekly Chart Update

 

When any wave positions I have, that do not seem to fit well, then I try and review  any 5 wave sequence I might be working on.  In this case there is still a very good chance that our Cad still has to crash to a new record low, even if it just makes a brief double bottom.  The only way that I can make the 4th wave fit, is that the 5th wave is a diagonal wave structure. An inverted zigzag 4th wave is still the best fit. Commercials have a net long position, but not enough to turn super bullish on our dollar!

Our Canadian dollar has to soar to support a surging gold price, but this is still far away from happening. The AUD has far more commercial net long positions, with a ratio of more than 5:1.

The CAD Market Vane Report (MV) is fairley bullish, with about 47-48% bulls present with Tuesday’s report that leaves lots of room for bulls to come back in.

Even when some COT reports get to an extreme, they can make dramatic shifts, but dumping longs, at the same time they take on short positions can extend any trend.

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Euro Daily Chart Bearish To The Bone?

 

The Euro repelled to the downside after  3-4 attempts at breaking out and is now threatening support. What I see is a potential triangle inside a 4th wave, which is also a warning that a bigger degree bottom is coming. I brought back my  Euro bearish wave counts, and if they are true then that does not bode well for the metals and gold stock ETFs that I cover.  Wishing that Gold will soar, has no hope of happening just yet because the Euro moves inversely to the US dollar.  What all this means, is that the Euro bear market is far from finished, and should hit new bear market lows. That may happen this year, as we have a lot of empty space below the present positions. It’s not completely empty space, as it contains more Euro futures stop-loss sell orders that we can count. It also contains any futures options positions that can expire on any Friday.

Hits: 9

US Dollar Daily Chart: Still Heading North!

 

The recent rally in the US dollar could be just Submiuette degree but it is enough to question any bearish wave counts I was working. At least in the short-term. I looked at last weeks USD COT report, and they are about as bearish as I have ever seen them. 25:1 is what we have right now, while the speculators are doing the exact opposite.

The speculators only have a 6.68:1 net long position, but they are the ones that always get into a trap in one direction or another.  The thing is, the traders in the Euro do not support such a bullish outlook just yet. As I was counting out the Euro at the intraday level, it sure looked like a small triangle has completed. Invert the Euro and we see the same thing with the US dollar.

The US dollar rally will sure keep the lid on gold prices, which may change on a month to month basis.  Even a “Head” is forming, which you will see if we draw an invisible angle line.

Any small correction can still happen but otherwise, I would need a complete set of 5 waves in Minute degree.  The 2008 bottom of the US dollar was a Cycle degree wave 4, so there is no chance the US dollar is on some manipulated path to kill any gold rally. The future threat is not inflation but it’s deflation and this FED rate increase is still fighting inflation.  Even at these elevated price levels, the USD has no room to make a long decline, so that also keeps the US dollar in a long-term bull market. Inflation has nothing to do with how much they print, but it’s all got to do with the “Velocity” of any money in the economy.

It’s the demographic age shift of the “Boomer” generation that will slow down future velocity. Since 2011, 10,000 “boomers” are retiring every single day, which will last until about 2030.  It’s not rocketing science folks as all those boomers will need to cash in their RRSPs and downsize as we become non-productive, leaving the workforce in droves. I’m still very productive, as my little mouse finger does all the heavy lifting. 🙂

I will keep this update short for now, as I may have to make changes, but it may last until the end of this month before, clearer picture forms.

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Euro Weekly Chart Review

 

Since 2008 the Euro has been in a decline or bear market with wild counter-rallies thrown in to keep us all confused, in what the real direction of the Euro is.

The Euro makes up about 57.6% of the US dollar basket, so there is no chance that the Euro will wander in some direction other than inversely to the US dollar. I’m working a  Primary degree diagonal wave 1 with the USD,  but this would be inversed when we look at the Euro. The Euro will not separate itself from gold as the Euro bull market and gold sync up extremely well.

I’m a bit suspicious with my short-term wave positions as we would need a bullish phase to complete wave 2 up in Primary degree. If the bottom has completed, then the Euro should push higher, creating new bullish highs in the process. We have 3 months for this market to give us a clear, “make or break” type of move.

 

 

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US Dollar Intraday Rally End!

 

I’m sure this bull rally would be a concern for gold investors but the shorter term we could be heading to a wave 2 bottom in Primary degree. It’s the US dollar that will drive any gold bullish phase, not a bunch of emotional investors running to a safe haven asset class. This may work short-term but long-term deflation is the real threat, which means that the US dollar bull market is far from over, as I expect 5 waves up in Primary degree, which could take until 2041 to peak out. In 2008 the USD bottomed, so 30 years from 2008 could get us a peak in 2038.

This move may be too early for a wave two peak in Minor degree, so I have reduced the degree level, by one degree.  Gold will benefit from a US dollar decline, but this may only last until late 2019 or early 2020.

Those that ignore the ongoing “Boomer Crisis” and the huge demographic shift, will not understand the deflation that is coming. How much money a nation prints,  has nothing to do with “deflation” or “nflation”, but it all has to do with the “velocity” of any money.

If you think that 10,000 from 80 million + boomers retiring per day is inflationary then, I suggest you research it, as it is a worldwide problem. Boomers that have not moved away from the risk facing them, will lose the majority of their assets if they invest for the long term.

 

 

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Russian Ruble: From A Bear To A Bull?

 

The Russian Ruble hit a bottom about two weeks ago and has now started to turn up. We could have a bottom from the correction. This bottom could produce a “C” wave bullish phase, or even another 5 waves up in a Minor degree that would change this into a 5 wave sequence in Intermediate degree. The difference between the two may only be cleared up, if we get a very choppy bullish phase, instead of any smooth sequences.

Either way, if the correction is right, then the Ruble should breakout to new record highs. The commercials are net long, but not by very much.

I can’t maintain any intraday moves but will try to catch the top when it happens.

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British Pound Daily Chart Bull Market Update

 

The COT report you see above is for the British Pound which shows that the commercials or hedgers have a massive long position, and then on the flip side, the bottom shows all the managed money positions or large speculators with a bearish opinion. Two massive opposing views in which way the market is going to go. I watch COT reports for over 18 years and I know that it is the hedge fund money speculators that “always”get into a trap of one type or another.   Any wave analysts that is still bearish on the BP will have the wave positions trashed all the time.

It is futile to count bearish wave counts when the numbers are so skewed against the GBP bears.

 

This daily chart I added 100 bars,  keeps the Primary degree “B” wave bottom in view.  What follows the “B” wave bottom should be 5 waves up in Intermediate degree. 1985 was a pivotal year for many currencies that made a wave 4 bottom in Cycle degree.  A short description would be, “it’s a bull market”!

Elliott Wave is much easier to figure out from the idealized vision, and I ask the same group of questions before every turning. Where am I, and what do I need to fill the entire “C” wave in Primary degree? In this case, 5 waves up in Intermediate degree is the only idealized pattern. When a pattern does not happen, then it should always force a complete review.

When was the last time that a wave analyst has shown you a complete Cycle degree update, with the 1985 bottom visible? 1985 ended in massive moves making those spikes stand out like a sore thumb. If I see 1985 ignored then those analysts have no clue where they are. Anyone can flip numbers and letters around inside a computer, but get them to count it out on a big monthly chart with pen and paper, they will not be able to do it.

The correcting phase may still be in effect so wave 2 would still have to be adjusted in the future.

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US Dollar 1985-2018 Monthly Chart Update

 

I’m sure all the gold investors will be grinning from ear to ear much like the Joker in a Batman movie, as the US dollar keeps declining. What this big chart shows is the huge falling wedge from that 1985 peak, which stopped in 2008 before it blasted in a surprise move. That 2008 rally was no surprise to the contrarians at that time because I documented the turning in great detail, and at that time I also had some futures long contracts out on in, and caught a good part of the move.

From the 2008 bottom  I spent years counting it out as a bear market rally, and switched to a bullish wave count as well.  The idea that a beautiful impulse is still going to happen, will fail as soon as the USD dips into my wave “A”.  It doesn’t even have to get that far as, but if  the USD is in a much bigger bull market then the US dollar will find a major bottom and reverse. The wedge is telling us that a huge bull market still has to form in the US dollar.

The US dollar is heading into a correction that may take it down to that 80 price level before it finds a solid bottom again. Since the Euro makes up about 57% of the US dollar index, it has shown very bullish moves inverse to the US dollar.  When the US dollar does find a new bottom then many of my COT reports and the Market Vane report, will also change to a bullish reversal. I believe the ETF UUP would be a buy once wave 2 in Primary degree sees it’s bottom.

Without a doubt the US dollar will soar above 120 and even beat or double top the 1985 peak at about 165.  This may take until 2041 to happen, so only the younger wave analysts will benifit in the long-term.

 

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Australian Dollar Weekly Chart Update.

 

The Australian dollar is not in the US dollar index, but it reacts much like our CAD does. Commercials have shifted to the long side while the speculators are in a bear trap. Maintaining a bearish wave outlook will not work. The choppy ride up in the last several years looks just like a bearish rally, but they also can belong to a diagonal bullish move. The AUD may have already turned the corner so it needs watching to see if it confirms bullish wave action. I will not produce intraday Minute degree wave counts anymore, as all I need is to confirm 3 degree levels, and Minor degree is it.

I believe that we are in another bullish stage that is heading up to a “B” wave in Primary degree and once this peak becomes clear a new commodities crash will happen. 2011 was a 30 year mania peak which all commodities follow. All commodities as a group have a unique idealized blue print that I am mapping in my memory first, when we don’t, how do we know what we are supposed to be looking for?

Sorry folks, but I’m not any fan of modern-day wave analysis, as they do more damage to investors then they know. Big currency moves are happening and Cycle degree wave 4 crash in the AUD is still to come. At least until solar cycle #25 starts we should see deflationary times as part of the 30 year cycle that I use. Supercycle degree wave 3 in gold will not arrive until 2041 which I’m sure the CAD and AUD will confirm.

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Canadian Dollar 2002-2018 Update

 

Our Canadain dollar wave positions needed some work. Last week things changed as many important COT reports had strong shifts including our CAD. Hedgers are still net long while the speculators are net short.

I started wave tracking the CAD back in the late 1990’s. At that time it was a wild ride, and it looks like it might do it again. I moved my Cycle degree peek over to the 2011 peak, as that matched the gold&silver mania bubble in 2011.  All commodities are linked together with zigzags and the twin tops show how related or CAD is to both gold and oil production.

What followed in 2011 was a swan dive that had a big bear market rally and followed by a set of 5 waves smaller in size. The late 2007 peak has a huge spike in it, then eventually another major spike at the 2016 bottom. CAD and oil like two pea’s in a pod! What followed in 2016 was a wild ride that looks like one of the best zigzags ever formed, which has not changed.

The crash into 2016 is a zigzag with a long tail. The 1929-1932 crash did the same thing so, if it happens once than I  look for that pattern all the time. The next big zigzag is in progress but the Primary degree “B” wave is not even close. “B” waves can contain flats that start out with smaller degree zigzags, and our CAD fits that very well right now.

If we maintain a bearish CAD veiw we will be wrong every step of the way as a new bullish phase may have begun.  5 waves up in Minor degree is on the menu, but it looks very choppy on the daily charts. That’s ok, as it looks like a diagonal wave structure is starting to form.

Our CAD is not going to the moon, but it can head to a triple top, in the next few years.

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Euro Daily Chart Bullish Update.

 

The Euro makes up about 59% of the US dollar index, and runs inversely to the USD all the time. It’s impossible for the US dollar to implode without the Euro going the opposite way. Short-term in the next year or so the Euro should rally which I think is a wave 2 rally. Last week many COT reports changed dramatically which is a sign that “shit” is about to hit the fan!

Sure the Euro can make some wild corrections but I will no longer be bearish on the Euro until I see the impending bullish phase start to get real tired! Bulls can only run so long and then they get tired and must rest. The Euro bear market is far from finished, so the next 5 waves up will end and then die again.  On a weekly chart we are still in a Golden Cross position so that also helps make a strong bullish case. I hate to miss any 5 wave run in Minor degree, but GDX will provide the same type of a 5 wave move.

The COT reports are not ideal but COT positions in other inverse related futures do. The Euro will also join the Cycle degree 4th wave club, but it’s 4th wave peak was in April of 2008, along with oil.

In 1985 the Euro also hit a wave 3 bottom in Cycle degree. 1985 is a real popular year as it stands out like a sore thumb, so there can never be an argument. The only argument or disagreement you will find is between all the wave analysts trying figure out what wave position it really is. We can’t wait for them folks as I already have mapped it all under Cycle degree guidelines, and it’s the readers choice which he wants to waste his time with in following. SC, GSC, and Submillennium degree wave 3 markets are far into the future as that is what Cycle degree forecasting is all about.

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US Dollar Weekly Chart

 

The US dollar had been running north but the hedgers, (commercials) have increased their bearish positions on the US dollar. Many COT reports have seen strong reversals of positions, so it’s not just the USD. Long term the US dollar is on a major bull market, but during any USD bull market correction will send the price of gold soaring. I was looking for 5 impulse type waves but the next low could very well dip into what used to be my wave 2 bottom, but now I have to work it as a diagonal wave 1 in Primary degree! Diagonal wave structures are very common in all commodities, which are just zigzags connected together. Small zigzags to very large zigzags is the rule not the exception, as we will find very few flats, except for zigzag corrections.

Flats are pretty rare in commodaties, so knowing  how to count connecting  zigzags is very important.

The 2008 low in the USD, was a 23 year low, from the massive 1985 US dollar peak. (British Pound bottomed the same year) That 1985 peak is a Cycle degree wave 3 peak with 2008 being the 4th wave in Cycle degree.

If the USD still implodes this year, then gold should soar. What will happen with crude oil remains to be seen, as the gold/oil ratio will not stay at 17:1!

It may be hard to understand that the US dollar is in a huge bull market, but that only concerns gold investors, it matters little to traders who can bet in either direction, up or down.

This big US dollar bullish phase is heading up to Supercycle degree wave “a” and may not arrive until 2041. The USD could arrive 3 years earlier as there is a 3 year difference between the USD and gold.

For years I counted the USD as a big bear market rally but it sure fought my wave counts every steep of the way.

 

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Canadian Dollar Weekly Chart Update

 

I see the trend with our Canadian dollar as still be down. Since the 2011 peak coincided with gold, the CAD bearish phase really took off. From the 2016 bottom we have what is nearly a perfect inverted zigzag, which are just bear market rallies. To confirm this the CAD must still completley retrace its entire move below the 2016 low. Commercials are already building up their net long positions but that can swing just as fast. Not until the hedge funds turn extremely bearish and commercials far more skewed, can I turn bullish on our Canadian dollar. Even the Market Vane report only shows about 50/50 bullish readings, which is not even close to being extreme at this time.

The CAD started a decline but it has been very choppy just like a diagonal wave structure in a 5th wave can be.  Even when the chart is still fairly high, our CAD can free fall the rest of the way to a new record low.

The Death Cross has already formed in the daily chart but is still a bit short from the Death Cross on this weekly chart! What has more power? COT numbers or another Death Cross. Hopefully we will find out more this fall, as I put my vote on a Death Cross having the real power!

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Euro Weekly Chart Bear Market Update.

 

The Euro is in the US dollar basket so when the US dollar is bullish the Euro will turn bearish. Sure we had a great run in 2017, and gold responded. The problem is, if the Euro is in a bear market rally, then a complete retracement of this bullish phase will happen. The hedge funds are still very bullish with the Euro, but the commercials are building up their short positions. This doesn’t get me all warm and fuzzy to call a super Euro bull market just because of the 2017 rally. There is an expanded pattern in this 4th wave, just like there is in the US dollar.

Even as other COT reports favored gold just recently, the Euro postions do not come close. The hedge funds have to switch to net short postions, while the commerials build up their long positions.

The Death Cross in the Euro daily chart has already happened, with the weekly chart Death Cross still to happen. Right now there is a toss-up if  Death Crosss have power over COT reports. I hope to have a better understanding of this by the end of the year. So far Death Cross over COT reports rule with the Euro!

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US Dollar Daily Chart Bull Market Update

 

The US dollar refuses to die and that is because it’s in a huge bull market which only a few market observers understand. I have been mapping this huge bull market to memory first as we have to “see” the pattern first before we can count it out! Wave counting is a secondary act of confirming what we think we are seeing.

This bullish phase can still last all year, but I do expect a violent US dollar crash to happen during 2019 and even last until early 2020. (March) This would happen when the US dollar corrects for a Primary degree 4th wave crash after which we will see a bullish phase in the US dollar that will shock us all. It sure will be a surprise for gold investors as they will get burned in the process. The US dollar bottomed in 2008 as a 4th wave Cycle degree bottom ending with a zigzag. Oil peaked with the US dollar bottom, which seems to be 3 years apart from when gold peaked.

“All” commodities are linked together with zigzags in a diagonal world and where the EWP rules are constantly being broken. It is impossible to make sense with commodities, if we can’t count inverted zigzags lasting over 40 years. Gold bugs have a real problem with a big US dollar bull market as the gold price will get crushed during the next 3 years. This year or in September, gold will break below $1047 and even end up crashing down between $700-$800.

No matter how bullish the US dollar is very long term, it is during it’s corrections that gold and gold stock ETFs will soar. From a traders point of view it matters little as we have the freedom to bet down or up when the time comes. I’m very bearish on all gold stock related ETFs and have no intention of closing off my bearish positions. I have added options to the mix and they have to get closed off a week or so before their expiration date turns them worthless!

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Euro Daily Chart Bear Market Review.

 

It looks like the Euro is resuming its bearish trend where no support will hold except for a short term basis. We also had the Euro Death Cross at the Euro price level of 1.200 and we still have the Euro weekly Death Cross ahead of us. The Euro bearish trend is much bigger than what the majority think. Gold needs for the Euro to soar and not head south, but I see no signs that this will happen any time soon. Even the hedge funds and commercials have net short positions on the Euro which definitely confirms that the Euro is not going to keep heading north. A 4:1 net short ratio would be at the extreme range and we are not even close to that just now.

Last weeks Market Vane report still has far too many bulls present so even that does not confirm a major bull market in the Euro will happen.

The speculators or hedge funds always get into one trap or another, but it must be a far bigger bear trap than what we presently have. What power that any Death Cross has over the COT reports remains to be seen, and I’m watching this on a regular basis. This may take the rest of 2018 to play out but then 2019 could be very bullish for this Euro cash futures contract.  Again, if the Euro is in a bigger bear market, then complete retracement of the entire 4th wave rally will happen as the Euro must eventually slice through the bottom trend line. as well.

 

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Euro Daily Chart Update.

 

The Euro is going the opposite direction from the US dollar, but with this chart we had a bit of a rally in the last 10-11 trading days. Last weeks COT report show that the speculators (hedge funds) and the commercial traders are both in a net short positions on the Euro. Not by that much but they are both definitely net short at this time. This does not support a big bullish move in the Euro which gold investors must get to keep the gold bullish dream alive.

The Death Cross on this daily chart has already happened, with the weekly chart Death Cross still ahead of us.  Dreaming of a mythical Euro bull market sitting on top of an impending weekly chart Death Cross, is not my idea of a bullish position I would take.

Market Vane (MV) report had about 48% bulls present in Tuesday’s report, which would still need to shrink as bulls keep disappearing! Any reading below 10% gives lots of room for a large group of Euro bulls to come back in.

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US Dollar Daily Chart Update!

 

During July and August the US dollar started to go sideways before it started another correction. There can always be a bit of downside to go, but a higher low seems to already  happened.  Since we have two spikes to draw a H&S line across, we see that this can be very bearish for the longer term.  If the US dollar is in a much bigger bull market, then any H&S reaction will blow the lid off the right sided shoulder.  When the US dollar breaks out it will help to confirm that the US dollar is far more bullish than we can imagine at this time.

A bull market in the US dollar is “deflation”, as it will also kill the price of gold. The $1200 gold price is a psychological even number, so when this $1200 no longer holds, then this will really upset the gold bulls. Without a doubt the US dollar will break out to new record highs, as the Euro implodes again. One main USD price high to beat is 107 or higher and then 122 will be another price peak that eventually gets hit as well. The first major breakout could happen by the end of this year, but that is still 4 months away.

Yes, the commercials are building up net short positions in the US dollar, but they can handle extremes as they are the closest to the industry and have far less risk that any of the hedge funds have. (speculators). Even my Market Vane report showed a high perentage of US dollar bulls present, which suggest that the US dollar could still implode.

Once the US dollar resumes its bullish trend, then the Euro will carry on with it’s bearish trend. Again, gold investors need for the Euro and our CAD to keep going up, as the CAD and the Euro are inside the US dollar basket.

The Euro will travel in the opposite direction than the US dollar, so wishing and praying for the Euro to soar is very unrealistic at this time.

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