Tag Archives: US DOLLAR

US Dollar: Resuming it’s Bearish Trend?

The US dollar has been in a bearish mood lately, but it can still create another corrective pattern as well. 89 is just one rounded Fibonacci  numbers I use, and the US dollar has turned around that number before. Commercial traders are still net short, so chances of jumping into a huge USD bullish phase are low on my list. Wild counter rallies do happen and they can’t always be spotted before they happen.

Any decline in the US dollar for “any” fundamental reasoning, will help keep the bullish pressure on gold.  At least until the entire US dollar bearish move has completed. There are no contrarian indicators showing up,  that say we are at the bottom of a US dollar bear market.  We might get another “C” wave attack, that can force another leg up with the US dollar, but then I would bet that the commercial traders positions would also have shifted dramatically.

In the last few days, the declining  pattern has been a diagonal pattern, which could run out of steam in the short term.

This could be very slow going as well, so I will not report every little wave made with the US dollar cash index. Futures are leveraged asset classes which produce very wild moves. Futures are played in both directions creating these wild swings, which Bitcoin traders can’t really do. The lack of  short players in Bitcoin reduces the wild moves, otherwise the Bitcoin waves would display insane moves in both directions.

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US Dollar Intraday Crash Review

This US dollar index rally hit a brick wall on the 1st of March right on the same day we had the full moon. Last week the commercial traders were still in a net short position so the odds of a huge bullish move are reduced dramatically. A small set of 5 waves heading down, has already formed, but this should build into bigger counter rallies as the US dollar adds on another set of 5 waves in Subminuette degree.  What type of 5 wave sets is not clear, but any 5th wave can turn into diagonal waves.

If what we see has been a bearish rally, then the US dollar price level of 88.300 “must” get hit or breached. No US dollar triple bottom will hold once we get closer to that bottom trend line.

With president Trump conducting a trade war with new tariffs on steel and aluminium, should not be a surprise, as he made it pretty clear to all during his election campaigns what he was going to do. The last time a president conducted a trade war was with the June 1930 Smoot-Hawley Tariff Act. The Smoot-Hawley Act came into existence a month after the 1930 “B” wave top in Cycle degree. 4-5 months for a Cycle degree bear market rally in stocks sure does not fit the timeline length but it fits sequentially very well.

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US Dollar Intraday Crash And Rally Update!

The US dollar has resumed its downward path recently while the Euro charged up. This is the great inverse relationship that also influences the price of gold in US dollar terms. As long as the US dollar remains bearish over all, the gold price should keep on benefiting.  It also works the other way, when the US Dollar is set to rally, then it usually crushes the price of gold as well.

The gold price got crushed in 2011 as stocks took off  and the US dollar charged up during that time.  The US Dollar hit another record low this morning  before it reversed and charged back up  ending with another small spike to the upside.

To finish the 5th wave down I need 5 waves down in Minuette. Since it’s a 5th wave decline, this 5th wave can extend dramatically so there still could be some downside left in the short term.  Sooner or later we  may end at a wave 1 in Minor degree and then a strong US dollar rally should happen.  It could be a slow move or a violent wave 2 counter rally, but in the long run the US dollar should resume its bearish trend.

A rally does not make a bull market, but a rally big enough sure can fool the crowd. The easiest crowd to fool are the speculators as they always get themselves into a trap. Recognizing that a trap has formed or is forming, allows us to get out of or into positions,  that otherwise very few people can ever execute.

In order for the US Dollar to turn back into a real bull market, we need the commercials to switch into an extremely skewed net long position. They are net long already, but not nearly enough for a super bull to materialize. The bearish phase can still last until the end of the month, so until I see all 5 waves down being completed, this bearish phase is still active.

If we are approaching a higher degree wave 1, we could get some very choppy declining patterns indicating that diagonal waves are starting to dominate again.

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US Dollar Bullish Cycle Still In Progress.

There still is a threat of the US dollar to head a bit higher as sideways movements can’t be trusted for very long. We could add on a wild little spike to the upside, which can always produce fantastic reversals. From my perspective, this is a 3-3-5 move which means its an inverted flat and a fake.

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US Dollar Intraday Rally Update.

The carnage in the stock market seems to have done little to the US dollar as it just kept right on its bullish path since early February.

The US dollar rally is a bearish rally, which could still fill a wave 4 rally a bit more, to match the wave two rally that this 4th wave is part of.

Everybody on the planet has to hate the US dollar before its bearish phase will come to an end. In the long run the US dollar decline could end at a wave 1 bottom in Minor degree after which another US dollar freefall trend should happen. It would be great if this US dollar rally were to finish later this week, but that is a best guess scenario at this time.

The commercial traders are net long the US dollar, but not by any extreme ratio, so they still have very little power behind them.c

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US Dollar Intraday Crash Update

The US dollar keeps on crashing, and it should continue for the foreseeable future.  Surprise rallies will be part of the landscape, but when we are in a big bear market then any rally will only be a temporary thing.  Gold has responded to the USD crash like it has done many times before and has broken well below the 91 price level, that I have talked about in my updates.

I have another couple of downside targets that I would like to see get retraced. One of them is the 89 price level with these futures charts, another price level that should get hit will be at about the 80 range. A falling US dollar is basically inflation rearing its ugly head, but that is what politicians have wanted for many years, with their 2% inflation rate.

Buying gold after it has already soared does not protect us from inflationary pressures, but this is what gold analysts keep telling us we should do.

They may just be starting to recognize the fact that the US dollar could be in a bear market, which makes them pretty slow in recognizing any trend reversals. When you are watching the evening news and two or 3 different talking heads mention how the US dollar is crashing, then chances are good the US dollar will reverse and soar.

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US Dollar Intraday Bear Market Update

The US dollar has made some violent moves lately. One minute it can be a calm decline and the next thing you know it wakes up and swings violently in both directions. Any asset class that is related to commodities has some serious leverage to it. I consider all currencies as a commodity as well. The majority could be just waking up to the fact that the US dollar is in a bear market, which is usually the time when downside consensus forecasts start coming out. This news is a little harder to find right now, but on major turnings, there will be no doubt in how the public will be feeling.

I dropped my degree level down by one degree, which makes the wave action seem more sensitive, which can also get us out of a trap. The degree level is so small that I’m scraping the very bottom of the list.

Any US dollar bear market is not over until more bears jump on this bandwagon going south. On the 10th a violent move up could also be part of a diagonal which contains mostly zigzags. We are presently on a very small move up, but could see more upside before it’s finished. It’s the US dollar decline which is the main driver of the gold price, but other times the inverse correlation is impossible to see for short periods of time.

We will have to wait until next week before we can find out how much more downside in the USD we’re still going to get. We can get a strong counter rally with the US dollar at any time, but it doesn’t mean the bear market is over.

Short term we could see some wild bullish moves, but in the bigger scope of things I’m still very bearish.

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US Dollar Intraday Bullish Phase Update

After a great US dollar crash or swan dive, it has now recovered and started to soar with the stock markets again. This rally is not the resumption of the big US dollar bull market, but just a small bearish rally. We will get these small counters rallies all the time, but the trick is not to get fooled by any single rally, even if it travels further than anticipated.

Long term this US dollar can retrace its entire bullish phase, which started in early 2008. The US dollar rally started well before the stock market bottomed in early 2008.  A few places where my parallel lines get sliced in two, is not that big of a deal from my perspective. Trend lines are abused by most technical analysts, as it’s not rocket science to see a trend line. Even a kid with a ruler can see the trend lines without any instructions.  A little more upside can happen, but the reversal should push the US dollar to another record low.

Gold has also reacted down with this US dollar rally, so if gold is still set to soar, then the US dollar is still set to crash and burn. As usual the majority can never take advantage of these cycles, as they don’t have the patience to ride out any corrections.  Emotional traders charge through most of the markets, chasing anything that moves up or down, but the seasoned contrarians get a big laugh out of these market antics. Monkey See! Monkey Do! Seems to be the herd mentality at any given time.

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US Dollar Intraday Rally Update

The US dollar has charged a bit higher than expected. Another zigzag rally could be in the process of completing, which I will use as a wave 1-2 in Minute degree.   There is also a huge open gap, below present prices, so this acts like a magnet and eventually it will draw prices down to it. 

With the stock market still acting very bullish, the US dollar could soar in a dramatic fashion.  We do have a questionable Minor degree 4th wave top which gives us a few more options,  than just a single counter rally 1-2 wave. 

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US Dollar Intraday Decline Update.

For now I put my 4th wave in Minor degree back up, for now. The decline sure has diagonal parts to it so that helps to confirm that a potential 5th wave decline is in progress. I do have an alternate wave count for the entire bullish US dollar move, but that is still too early to comment on.  Once we get closer to the 92 price level, the alternate pattern may  clear up some more.   Our present USD rally  has already a small spike in it, but a mini double top would be a better fit. From this wave 2 rally, the next decline should be another zigzag type of a move.

There is nothing that blocks the US dollar from going much higher as “C” waves can do some wild and incredible things. Gold has been sluggish in its rally, but that can be irrelevant when a diagonal bullish phase is in effect. At this time,  a big bearish move is still in the cards, as the 2016 top can be a “D” wave in Primary Degree.   That potential “D” wave top would give the US dollar a full 8 year bear market rally.

I keep my options open as the entire 31 year US dollar decline from the 1985 peak, is just a giant triangle.

 

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US Dollar Intraday Peak Review

Last Friday the US dollar peaked and then started to decline. No real downside spike has formed so this could be the start of the next leg down. I have to keep an eye open for another decline that can be a fairly smooth declining impulse, but we could also get a drawn out zigzag decline.  The ultimate low to beat is the 91 price level,  as a complete retracement is about the only thing that will confirm that the entire October rally was just another bearish rally or part of one.

I started with Micro degree and will update the degree level as this bearish leg starts to play out. If a shorter zigzag forms, then another wave 4-5 could get added on, but this is the least of my favorite alternatives.  If the US dollar bearish mood returns too soon, then an early counter rally would be close at hand.  I will not emphasize the COT reports too much as they work best at the extremes.

Our Canadian dollar has also turned in the last day or so, but it eventually must reach a new high, if its bullish cycle is just a correction.

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US Dollar Daily Chart Rally Review

What we have on the daily chart is a vertical move, that could be the exhaustion wave, of a counter rally. The question is, if another wave 3-4-5 will still happen or if the US dollar starts to head south again?  Our Canadian dollar also took a big swan dive in the last few days, which just confirms the inverse relationship to the US dollar.   When the US dollar decides to turn down, then our CAD should start to turn up.

Let’s say that I have at least 3 possible tops in the larger degree, and that a zigzag decline is still realistic. This 4th wave rally can turn, and produce yet another long extension, before we get to the “A” wave position.  It  would be great if the US dollar ends on wave 1 in Intermediate degree.  The big question is, if the US dollar is in a big bear market or in just another bull market correction? Not until the US dollar shows us, that a zigzag of a bigger degree has formed, can I turn bullish on the USD.

The extreme bullish sentiment that the public signaled to us, on that late 2016 peak has not matched any counter bearish feeling of the same intensity. In 2008 the majority hated the US dollar, and in 2016 they just loved it again, so we still have a missing time period when the majority hates the US dollar again.

Any bearish mood we’ve had recently, is not enough for a new bull market to bounce from. Markets always behaved the opposite of what fundamentals may be suggest at that time.  In the commodity world, swings are far more dramatic, due to the massive leverage built into them.   

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US Dollar Daily Chart Bear Market Review

The US dollar has been in a bear market for all of 2017, and shows no signs of instantly switching back to its bull market anytime soon. If this entire decline is just a correction, then the US dollar would eventually pass that 2016 peak.  A return to the bull market has a slim chance of coming true at this time. Not until all 5 waves in Minor degree have played out, will the US dollar be ready to seek another larger direction. Even then if the new bullish phase produces wild and choppy waves than this rally will also be a fake. 

Not until the majority hate the US dollar and love gold, will it be time for a potential reversal.  At one time the commercials were net long with the US dollar which was the first time that happened since the 2016 peak. The last weeks COT report saw the commercials turn net short again, which was what I was hoping for. The commercials would have to be net long by a wide margin and for a long period of time before a big USD bull market can surprise us. 

We also have a mini H&S pattern setup with the right shoulder being a potential 4th wave peak. 

I would be wrong trying to give readers a bear market bottom price forecast, because in the long run the USD can completely retrace its entire 2008-2016 bull market. If an alternate wave count is in the works, then after the 5 waves in Minor degree are completed, we could certainly see a big surprise.

The “D” wave I show can turn into a  diagonal Primary degree 4th wave just as easily, which means another zigzag is in the works, but no new record low will happen. This is my least favorite option, but I like to keep alternate wave counts on the radar screen. 

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US Dollar Intraday Bullish Phase Record High.

There is only one trend line that touches 4 peaks while the bottom trend line is not even worth drawing, as it would only touch one wave bottom. Now if I added a bottom line across several wave bottoms, we would end up with a wedge. Any wedge would suggest a violent move to the downside, but 5th waves can be very boring and develop choppy waves,  that would slow any 5th wave at the best of times.   Any kid with a ruler can draw trend lines, but many experts abuse trend lines to a point where they become useless in forecasting anything. The US dollar would still have to go vertical to trash the top trend line, and short term this may happen. 

In the long run, starting from the September 2017 bottom, we have what looks like a zigzag. I can also turn the entire bullish phase into a flat with a 3-3-5 wave count. Either way, it works as a bearish rally, which eventually will retrace 100% of the entire bullish move which started on September the 8th. 

We also have several gaps open below,  which should get closed off in the next few weeks or even months. In the long run this US dollar rally is a wave 4 in Minute degree, after which we have one more set of waves 3-4-5 in Minor degree, to contend with. 

Most of the markets created downward pressure this morning, which is not favorable for a continued US dollar bullish path. 

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US Dollar Intraday New Record High Review

I was hoping that the US dollar would make a strong turning, but instead the US dollar pushed higher in another leg up. The last leg up looks like a zigzag but in smaller scale of things we can see a small set of 5 waves. The worst that can happen is another small wave 3-5 gets added on. This bullish phase all started when the commercials became net long for the first time since the US dollar bull market ended in early 2017.   They were the only net long by a few contracts, but for a major turn, their positions would have to be net long by a wide margin. 

When Friday’s report comes out, they could be adding to their short positions, which is what I like to see.  This USD bullish phase also shows in a small way how bullish stocks compete with gold and gold stocks. Technically speaking, if this entire bullish phase is an inverted zigzag,  then we should see the US dollar completely retrace its bullish phase starting point in early September 2017. 

The US dollar is also getting very close to the tops of the previous correction so that can add to any resistance pressures. I may have mentioned the 94 price level before, but it took this long to get there. 

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US Dollar End Of The Bullish Run?

I would love to see then end of this US dollar bull run, and this morning the US dollar may be cooperating so far. Nothing but a new US dollar bear market low will satisfy my bearish wave counts. We still need to be vigilant, if this bullish phase still has some bullish move up its sleeve. 

At the 92.200 price level, we do have an open gap so that would be a target price level for some temporary support. Just above the bottom of the 4th wave in Subminuette degree, there is a small gap which must get retraced first. Any US dollar high could also be the last high for this year, but that would need to eventually get confirmed by market action.  

Any US dollar bearish phase can return the attention back to gold and their share prices. 

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US Dollar Daily Chart Review

In the last few days I have been going over a very big chart of the US dollar dating back to 1794 and I still come up with a “D” wave top in Primary Degree for the latest 2016 top.  Until the US dollar completely moves away from any potential 3 wave decline, I will keep the impending “E” wave decline alive.

The US dollar stopped short of  the 92 price level and is now in a bit of a rally. If a 4th wave rally has arrived, then we are still short on time and pattern, before it completes. 

The wave 1-2 in blue is a Minor degree wave, but it is a bit small in physical size compared to other Minor degree turn we have had. The Euro is even smaller.  If I drop the entire US dollar bearish phase down by one degree, then in the long run it will go much deeper than we can imagine. 

Any “D” wave top means a 100% retracement of the previous bullish phase will happen.  If all this produces a zigzag that refuses to fall below the 2008 lows, then a Primary degree 4th wave top may also be a possibility.  When the COT report shows us what the commercial positions have done, we may get a better picture. COT reports come out every Friday, but it takes time to shift through them. If the shift is dramatic I will update this posting by Sunday. 

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US Dollar Intraday Bear Market Update

We are one full trading day away from another month end, which can produce some wild moves and turning times. In this case the US dollar may have resumed its bearish trend already. I’m extending this decline, which means smaller degrees have to show up, as we may still be well short of any 1-2 wave in Minute degree. 

Right now my degree levels are scraping the bottom of the stack, with only one degree left, based on the degree list that the Little Blue Book provides us with.  I will not show any wave counts that are smaller than the 15 degrees shown in the book. This will tell us that all realistic wave degrees are being used up, which they all must eventually fit into the bigger sequence.

There is nothing to stop the US dollar from making yet another high, and dragging this correction  out for a longer period of time. 

This Friday will be the jobs report, so expect some wild moves in the short term. Sometimes nothing happens, but the Payroll report has a huge following, and it can move the markets. 

This Friday may not have any morning reports, but I will update later in the day, and a bit on Saturday.

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US Dollar, Soaring To New Highs Or Crash And Burn?

 

 

 An intraday fast move like the US dollar has displayed in the last few trading sessions, can always trash a previous wave count.  We have very little room to move in, before this US dollar chart actually breaks out and makes another new high.  The rest of this week should tell us more, but if the USD does break out, then my Minute degree 4th wave can be moved to the new location, with very little work. 

We are a bit shy of that happening, but since it’s Washington’s birthday tomorrow anything can happen. I believe there is not a threat of the bear market getting killed off just yet, as the bullish behavior would be far more vigorous.  

Besides the month to month trend potential, many times turnings have been close to the 10th and 21st of each month. Many times,  this can be due to expiration days, or important news reports.  The US dollar still has lots of  people thinking it is still in a bull market, but we are going on two months since any record high, has been broken. 

When they see gold break out to new record highs, then the US dollar bulls may give up, but when that happens, chances are good the US dollar will soar. 

 

 

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US Dollar Intraday Rally Spike Review

 

 

Just this morning the US dollar spiked and then turned down. Spikes like this can always be a major turning point, especially when the trend travels between two parallel trend lines. As this trend can also work as a diagonal 5, we have to see what the next decline brings us.  If the pattern starts to look like too much of a correction and not enough like a diagonal 5, then we still may have a problem. 

Our potential “D” wave top has now disappeared from the left side of the screen and sooner or later we will make the February low as the cornerstone for the next several months or so.  We do have what looks like a running triangle which helps in telling us that another degree change must happen. 

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US Dollar Intraday Bullish Phase Review.

 

 

Just because the US dollar has rallied, does not mean it is off  and running in another super bullish phase. The waves have already overlapped too much for that to happen.  Since I’m working another zigzag, this rally should not break my top trend line. If and when it does, then another instant review must take place.   Gold seems to be charging ahead regardless of what the US dollar is doing in the short term. This shows that gold’s run has a lot to do with a run for safety.

Longer term, it is always about the US dollar and if you believe that the US dollar has already started a huge bear market move.  Since early January 2017, the USD has been in what I call the start of a major bear market, which the majority have not even clued in yet. They still hate gold, but I’m sure they’re  “love” for gold,  will return once the US dollar keeps going south. 

In January 2017, the US dollar may have topped at a potential “D” wave in Primary degree, which are all fake bull markets, and bull traps. In order for this to get confirmed, the US dollar will eventually have to retrace it’s entire bull market, and clear that 70-71 price level again.  This all may take until the end of solar cycle #24 which could be closer to the 2021 time period I keep talking about. Once solar cycle #25 starts you don’t want to have a bearish though in your mind as the upswing of solar cycles are bear market killers. 

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US Dollar Intraday Bear Market Rally Review

 

 

The US dollar is not off and running in the next phase of a bull market. I have mentioned it many times that the US dollar bull market is over. For 8 years the US dollar bull market was actually a big fake bull market, and one way we can tell is when any bullish phase displays and an extreme bunch of choppy waves, where impulse waves are impossible to survive. Forcing impulse waves onto diagonal waves is not an option. From the February 3rd low we do not have impulse waves, but they sure do make for a nice inverted zigzag.

If it all fits into the bigger picture remains to be seen, as we need the US dollar to register another new bear market low. The starting decline has been a diagonal already, so we should expect more of the same.  Once we reach a new low, then we have to expect a potentially strong counter rally, which could bring the US dollar right back up to present levels.

  When the entire planet becomes bearish on the US dollar again, then the US dollar bear market will be coming to an end, and a new bull market will start.  This may not happen for another 4 years or until solar cycle #25 has started around the 2021 time period.

 The majority completely ignore, the sun and its cycles, but I find them to have amazing powers over all activities on earth. This is not rocket science, but just solar cycle basics.  I will keep mentioning the solar cycle, as many have done detailed studies on this relationship,  but oddly enough, they ignore these studies when they are needed the most. 

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US Dollar Intraday Review

 

 

So far the US dollar has been acting out a diagonal script, but that does not mean it will continue to do that. Sooner or later I will be forced to change my degree levels up by one degree.  Chances are good that we have one more zigzag to complete which may force a degree change on us.  The way I have it now, we would have a very long first wave in Minor degree and that is very rare to say the least, and happens mostly in “A” waves. 

For the time being I will keep this wave count until the next zigzag is completed. Either way another lower low should be coming this month. 

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US Dollar Intraday Bear Market Review

 

 

Since December 3, 2017 the US dollar has entered what will be known as a bear market.   Some are still denying this fact, which is very normal. The strong US dollar has kept the stock mania bull market alive, but that should come to an end as this morning opening has demonstrated.  

With Diagonal waves the logic of the impulse falls apart very quickly as waves overlap at critical turnings. I would love to see a 4th wave rally and then still break well below the 100 price level. In the big picture I would need a zigzag, so for the foreseeable future we need to see 5 waves down in Minor degree after which we should get a substantial rally, that will stun the gold bulls when it happens. We are still far away from that being set up, so short term this trend should stay in place. 

I have many other asset classes that I want to cover, so these postings will be shorter in general.

 

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US Dollar Intraday Crash Review

 

 

All my chart’s are made fresh everyday, and I never use external indicators, or prices pasted all over the chart. 

The EWP does not run on price, it runs on a specific set of  patterns. The first two chapters of the EWP do not use any prices when they show you the idealized drawings.  The spike on the 11th did not stop at a predetermined price level, nor did a potential bottom this morning, stop at a predetermined price level. 

As the US dollar keeps crashing, the further the distance we make from the record top in early January 2017, the  greater the odds become that the USD can no longer come back long enough for a new leg up. Once a bull market is dead, all the wishing and hoping in the world, will not turn it back into a bull market. The direction that the US dollar is taking, gold will go the other way, which has crossed the $1200 price level already.  

Any counter rally can take us back to the previous 4th wave and even that will not be in a straight line, but can make several twists and turns to keep us guessing. 

So far it’s looking good that an impulse is in progress, but we always have to expect the unexpected, just in case we are completely wrong. As I mentioned this is not some simple bull market correction, as the US dollar bull market died,  on January, 3, 2017.  

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US Dollar Rally Review

 

 

I have to apologize as some charts I have posted still had a 2016 date on them.  At this time the US dollar made a move to the upside ending in a vertical spike. This is also a time when the USD can keep heading north if the big wave count has missed something.   The big test will come soon as the US dollar would have to continue heading south as it starts on its big bear market.  We are not looking for a correction bottom in a bull market, as this 8 year USD bullish phase sure counts out as a fake, or big bear market rally.  There aren’t too many circumstances when a false bull market does not get completely retraced.  This would happen at the 70 price level, which would make it about 31 points still to go.   

 

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US Dollar Hits A New Record High Again! Another Bull Trap?

 

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When we look at the USD and it is pointing up, in a near vertical move, then we have to look at stocks and gold to see which way they are pointing. Are they pointing in the direction of the trend?  I always look at it as a potential reversal that will surprise the majority of players in this market.  No bullish USD traders are going to survive the correction that is coming. They may think a correction is coming, but I think it will be much bigger, than any top trader can ride out. 

In the last 2 years or so, we had many USD spikes facing down, as stocks were all pointing down.  There were many examples of this action with the smaller degree levels, and I think it will be happening on a regular basis, in the years ahead. 

The 2015 peak was a false peak, just like stocks were a false peak as well. This new peak, that should soon stop, will be the home of a Primary degree “D” wave, which the EWP book describes as a bull trap. This USD bullish phase has now lasted about 8 years, and time will confirm that a rally this choppy, has just been a big bear market counter rally.  

 

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US Dollar New Record High Daily Chart Review

 

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The US dollar broke to a new record high killing the “D” wave top I have had since that late 2015 top. The new high is now 100.570, just breaking the old high of 100.500.  So will this USD high match the stock market highs soon?  This will remain to be seen, but I will remain very bearish with the US dollar and stocks in general, as stocks have also seen new record Trumponomics induce highs.  

What has to happen if we are in a delayed Primary degree ((D)) wave top, is I have to use a different pattern on any bearish move yet to come. There were not COT updates since the 8th, so I have waited until this weekend to see if new reports get issued.  In the last report commercials added long positions which makes the commercial traders right again. 

If the “D” wave is at a new location I still would need a big zigzag decline that should take the US dollar to new record lows, below that 2008 low of 70.  This may take 3-4 years to accomplish, but it could go much faster as well. Either way, the return of the USD bear market will happen, as the last 8 year bullish phase was a big bear market counter rally in Primary degree. 

This is much like what the Nikkei has done as I fully expect the Nikkei to see a new 30 year record low as well.

I will be looking for any type of 5-3-5 pattern in Intermediate degree, which should contain many diagonal wave structures, to confuse us and keep us guessing.  

We have one crazy tripple top right now, producing two Head&Shoulders as well so this is not very bullish looking from my perspective. Of course the USD bulls may just be calling for a major breakout at this time as well.  

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US Dollar 2008-2016 Primary And Cycle Degree Bull Market Review

 

dxy00-oct-15-2016

 

There are just too many choppy wave structures here, to classify the US dollar as a pure clean impulse. The Euro is very much the same, but the inverse of the US dollar. There is a good group of indicators out that makes it a rather futile effort, chasing a big bullish move in the USD at this time.

 The commercial and non-commercial traders positions is valuable information that needs to be looked at, when we are close  to major turnings, but this report does not come out until every Friday. The CFTC report, also known as the COT report, contains non-commercial and commercial net short and net long positions. 

Last week the commercials added 20,861 short contracts, which gave them a 6.7:1 net short position. This is a very bearish development  for the US dollar, and any imagined or real, super bullish rally, has really nowhere to go, but the opposite way. 

I doubt that any of those funny looking Fibonacci retracement tools will work, as there are literally millions of  Fibonacci relationships active at any one time.

The non-commercials, known as speculators, hedge fund traders, and trend chasers, did the opposite last week. They added 16,780 long contracts, which gave them a net long ratio, of 2.9:1. This is a classic US dollar bull trap setup.   

Not until these numbers all start to reverse, will we see another powerful US dollar rally.  Now that it is obvious that a top trend line can be used, I can draw in the bottom parallel line, based on the angle of my top line. Our recent US dollar rally should run out of steam soon, and then head south once more.  Overlapping is the name of the game in a diagonal wave, and this diagonal also confirms that the Primary degree run, is a 5th wave.  Recognizing that we are in a potential Cycle degree diagonal 5th wave, doesn’t come along every day, as this is a once in a lifetime opportunity to witness it before it happens.  

At 79 this would all start to fall apart very quickly, but technically the USD could fall to 73 and still fit a diagonal wave count. Mind you, the very last zigzag would be one wild ride, that will shock us when it happens. It also assures us that the last wave will be the extended wave.   

Any patterns that I see develop on a big scale, I use them in all other degree levels as well. This keeps the EWP simple and easier to learn. There are many of these types of moves, so it is nothing that I’m dreaming up. This is all very bullish for gold, as any US dollar decline, helps to push the price of gold up. 

Our present top has been counted much like this already, but I was out by several degrees. Maybe not this year, but certainly some time in the future, the USD will travel above the 100 price level again, and even soar towards 165. Yes, that is not a misprint, as the US dollar would head up to a Supercycle degree top, possibly by 2021.  

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US Dollar Daily Chart Review: Who Do You Love?

 

dxy00-oct-12-2016

 

 By the way this US dollar chart is flying, it seems the world is not dumping US dollars after all. It’s all the other currencies that are having big problems as the Euro can still melt down further into the abyss.  All the charts I have seen points to, that the  US dollar is in a bull market that is far from finished, but that can be heading up to a potential diagonal 5th wave.  My max is at the resistance trend line just below 100 after which it will break a very strict rule. Commercials are building net short positions, but they can do that for a very long time.

If a 5th wave down is in the near future, then gold would most certainly rally, as the perception would be that the US dollar is going to fail big time. From my perspective, all the stories about money printing that the US has done is going to send gold to the moon is a bunch of BS. The main reason is, it’s all electric money to start with, and electric money can go up in smoke just as easily as they created it.  Everytime you hear stories about some company or some billionaire, or the indices lose billions or trillions of dollars, that is electric money going up in smoke.

It takes nothing for the markets to dip, and all the millionaires no longer belong in the millionaire clubs.  You may see them jumping off the buildings once they lose all their electronic money, but that was also a myth back in 1929.  

The US dollar does not have enough height to produce a long sustain down trend just yet, and it’s not going to zero as many want you to believe.  That 2008 bottom was an extreme bottom any extreme bottoms usally means an extreme top some time in the future.  

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