Tag Archives: USD Bear Market

US Dollar Daily Chart Update

The decline of the US dollar has been in progress just under 13 months and I’m sure there is more to go, but short term radical moves can kill any wave count pretty quick.  The 4th wave peak in Intermediate degree is still holding, and I see no short term moves that will dislodge it. This blog is all about locating, and confirming all 5 waves in Cycle degree, and EW5  is the only blog I know of that is doing this. I say this so all new readers fully understand that  smaller degree wave counting must come before all the big wave counts can be justified or even confirmed. This also applies to currencies like the US dollar.

At this time I don’t think we are in any Minor degree just yet as the switch would have to counter rally much further. In this case the USD could be finishing a Minuette degree 4th wave,  which could be followed by a 5th wave extension. International trade wars are in progress, but I think it’s more about Cyber Wars that all major nations are conducting. The US dollar is caught in the cross hairs as it seems that the USA infrastructure is also a prime target for these attacks.

We can get all sorts of rallies, but none of them will charge back into a bull market., at least until all the commercials are net long by a very wide margin.

We also have to be prepared that the US dollar can soar when stocks make a huge counter rally. COT reports come out on Fridays and if there is a radical change I will talk about it.

The Euro could also see a pop so when the US dollar moves many other currencies will also react.

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Quick US Dollar Intraday Update

This is just a quick update as this potential “C” wave could be running out of steam. I would still like to see the USD spike to a new higher high, but that has  a 50/50 chance of happening. 50/50 odds does nothing for me as I want better odds than just flipping any coin for heads or tails.

I will never call this type of a move as a “Truncation” because they can work as running patterns very well. Even any zigzag can come up short, so it’s not like it can never happen. Next week could destroy the top trend line, but otherwise the US dollar should  resume its crash course.

Sure, there will still be many counter rallies, but the only real counter rally is the one that sends the USD back into a multi year bull market. That will not happen until the US dollar bears become trapped again, much like they were in late 2008.  This time it won’t take 8 years or so, but should only last 3 years at best.

The US dollar index is being drawn down towards solar cycle #25, much like the USD was pulled down to the solar cycle #24.  From this 2008 low the US dollar exploded right along with solar cycle #24, so I expect a US Dollar bull market after solar cycle #25 as well.

There is a huge USD wedge that will be finished in a few years, and these wedges can produce powerful bull markets. The VIX is a prime example of what happens when a wedge comes to an end. 1937 to 1942 also produced a wedge, and that wedge spawned a multi decade bull market.

 

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US Dollar Intraday Bullish Phase Update

The US dollar roared to an early March top, then proceeded with a bearish phase that sure can fit into a flat. By about the 27th this correction was over and a bullish phase started which is still in progress.  In this case I would love to see the US dollar  soar and completely retrace the top, as that is what corrections are supposed to do.

From my perspective the US dollar bear market will resume until my contrarian indicators start to tell me otherwise.  The commercials are still net short the US dollar, but the speculators are getting close to a 1:1 net short/long ratio. I don’t want to see an even ratio, but I would like to see the speculators become extremely net short before I turn bullish on the US dollar.

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US Dollar Bear Market Returns?

The general direction of the US dollar is still down. It’s declining in a choppy fashion so we could be looking at a 5th wave diagonal decline.  The Euro jumped as the USD declined, but the Euro is a better looking rally. It’s not a beauty contest, but a war between bulls and bears.  Right now the bears seemed to be winning as the USD slowly keeps  grinding down.

The commercials switched to a net short position, so this helps in knowing that a super bull will not suddenly possess the US dollar holders.  I think the US dollar still has to fall well below that 88.200 price level, but it must also be finishing the big Minute degree decline.  Price alone will never give you the basis of a major reversal, but patterns do. Yes, I use price, but it’s always associated with the pattern I may be working. Price forecasts by the experts sure didn’t help to forecast the end of the US dollar bull market, so why should they know when the US dollar bear market is going to end?  The experts never saw the end of the 2008 US dollar bear market so why should they this time around?

Nobody was expecting a media trade war to be conducted at record peaks of the stock markets, but they did.  The big question is if the US dollar bull market that started in 2008 was actually a fake bull market. Bear market rallies always produce total retracements which in the US dollar case, would be well below the 70 price level. It will be a tough call once this US dollar 5 wave sequence is done, as a strong US dollar rally would have to happen.

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US Dollar Intraday Bullish Phase Review

Since the January bottom the US dollar roared up in a zigzag fashion and then plunged down with what looks like a set of 5 waves down. I have an extra bounce during the early part of February which can also work as part of a diagonal. Sooner or later the US dollar should complete any bullish moves, but can still frustrate us to no end,  in the short term.

Investors love to see the US dollar soar with the stock markets, as it seems that investors are still infected with the “Stock Mania Virus”.  Stocks and the US dollar, soaring, caused gold to crash this afternoon.  We may see more upside with the USD but eventually it will resume its bearish trend.  We could still more upside, but last weeks COT report, the commercial traders are net short the USD.

US dollar investors have to get to a stage where they are extremely bearish towards the US dollar, and the commercial traders are piled in with huge net long positions.  Short term the USD bull may still dominate, but long term I’m bearish on the US dollar. (2-3 years)

I’m sure that once solar cycle #25 starts, the US dollar can turn and soar once again.

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Quick US Dollar Update

While many experts have still not clued in that the US dollar bull market ended 11 months ago. Bull markets end under extreme bullish conditions, like the USD did in 2016, while bear markets finish under extreme bearish conditions. (2008)   This has all been clearly documented, so it is nothing new. It happens over and over yet the majority can never take advantage of this, as an emotional herd has no memory.  They don’t learn from what has happened in previous turnings, and even then it is hard to believe that a bull market can start in the depths of a glut!

Those that think the US dollar is still in a bull market, are always looking for the real support price level. Good luck with that as in a bear market, there are no  permanent support prices. 

This rally, which can fit a small triangle should head to a new record low, but it may take several weeks or so to get there.  In a panic the USD can slice through my top trend line, and then reverse. Slicing through the bottom trend line will take a little longer. 

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December, 1, 2017 US Dollar Bear Market Rally Update

It’s a new month and I looked at this pattern from a diagonal perspective. That mid month bearish rally fits well as just another “B” wave, followed by a set of little waves to the November 27th bottom.   Since the US dollar can still be in a potential 4th wave rally, we may see the US dollars still thrash around, before another leg down develops. 

Many analysts do not track the US dollar as closely as we do with the stock markets, so we can get blindsided when the USD makes a crazy bullish move.   Is the US dollar slumping because of Bitcoin, we really don’t know, but I’m sure when the new Fedcoin comes out, the US dollar will play a huge role in it.  Any new Fedcoin will send Bitcoin into the digital graveyard, as it is not wise to think that the US government will allow you to make millions trading Bitcoins without paying any capital gains tax. 

For now this bullish US dollar rally has to end adding on another leg to the downside. Every rally with the US dollar can be interpreted, as the lift off to the continuation of the US dollar bull market. That’s not going to happen until the US dollar shows us, that a clear 3 waves crash has occurred, and the news is predominantly bearish.

All I have,  is 5 wave sequences during the entire 2017 decline, with any 5th wave producing overlapping wave structures.  At this time any “D” wave in Primary degree is still valid for the 2017 top. This means that the US dollar can eventually crash below the 70 price level and that 2008 low.  

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US Dollar Intraday Decline Update

I believe that September bottom is part of an expanded pattern followed by an impulse “C” wave bull market. The wave count from the October bottom could only fit into a diagonal 5th wave, ending with a very choppy high this month.  In the last day or so, the US dollar started another decline which could produce a H&S downside breakout situation.  If the US dollar makes another fast move down, then the 92.800 and 91.800 price level could find support for another “ABC” crash.

Instead of a 4th wave top, it could be an “A” wave top just as easily.  The best thing that can happen is that the US dollar creates a new record bear market low, which would help to confirm any expanded pattern that I do have.  Gold, and gold stock ETFs, should benefit as the US dollar returns to its bearish phase.

I started the new decline with a small degree level, which would extend any 5th wave decline. US Thanksgiving is tomorrow, so there will be no regular updates at that time. Now if only stocks started another decline, then this would also add motivation to run to gold for safety.

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US Dollar Intraday Rally Update

In the last 3-4 trading sessions, the US dollar has demonstrated is able to rally. For now I will keep the 4th wave degree level until it is confirmed. To confirm it the US dollar has to crash much lower and then create a new record low in the process.  Since 5th waves seem to be the breeding grounds for diagonal waves, I counted it with an expanded “B” wave.  Short term, there could be more upside, but eventually the US dollar should hit or get close to the bottom of my single trend line. 

If the US dollar wants to stir up more trouble, then the chances of  a “D” wave decline could also develop. Any “D” wave decline could produce another great looking H&S pattern at the 91 price level.

I’m sure the commercial traders positions will also swing widely if the “D” wave scenario materializes. “C” wave declines can also be fairly steep and even extend a bit longer than normal. 

Since the 2016 US dollar peak it still works as a potential 5 waves down with one long extended wave 3 thrown in to confuse us.  We would still have Minor degree wave 3,4,5 to contend with, after which the US dollar will make another bull run much bigger than anything we have had so far. This is still far away and could take the rest of the year to play out. 

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US Dollar Intraday Bear Market Update

In the last day or so the US dollar rallied and then plunged like a rock shortly after. This left a zigzag looking pattern in its wake, which was confirmed this morning by completing  retracing this zigzag. This looks like it can work as a wave 1-2 at this time. Looks are deceiving most of the time,as I can make this fit as a zigzag with an expanded flat thrown in for added complexity. In the near term the US dollar has to fall well below the 91 price level, just to confirm the previous 4th wave peak. 

Downward pressure on the US dollar helps to keep upward pressure on the price of gold as it crossed the $1300 price level again. 

Last week commercials switched to a net short position again, which was what I was hopping for would happen. Tonights report could be different again, but I’m looking for a switch to a much larger net long position, lasting much longer in time as well. 

Until that time arrives, the US dollar is still in its bear market. 

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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 Bullish Phase Review

 

We were expecting a counter rally and we sure got one. In the last few days we can see that the pattern had changed again as the subdivisions got smaller. At the very least we should get a correction back down, but how far would be just a best guess. The US dollar could crash well below my bottom trend line before it ends up soaring one more time.  There is no way that the US dollar is off on some huge new bull run, even though the commercial traders are net long with their US dollar positions. By this Friday it could all be switched around again.  

Commercial traders are also net short our Canadian dollar and the Euro which are both currencies that travel inversley to the US dollar. The commercial positions would have to shift much more to the extreme side before a switch to a long term bullish phase will happen. 

In the short term we have to put up with this bullish phase, but longer term the US dollar still has a long way to go down 

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US Dollar Daily Chart Bear Market Update

I regularly review the US dollar from its 1985 peak, and since then any big bull market we have had, turned out to be a fake bull market. They are fake bull markets when these bullish phases are completely retraced. The last day of 2016 the majority were very bullish on the US dollar and stocks, and bearish on gold. For now I can keep my Primary degree “D” in its position, but it can also double as a 4th eave top. As a “D” wave top of a triangle I would need another complete zigzag to help make my bearish case. Even though the dollar declined the stock market surged the entire time. This is not all that unusual as the same thing happened with the 2002-2007 rally in stocks. 

This 2016 peak is now the third peak since 1985, and it too could end up being a false bull market. When the USD falls below 89-88 it can  still be a diagonal 4th wave decline. This is a low probability, but I have to be open to alternate wave counts. 

The commercial traders are still net short on the US dollar, with the speculators still in a net long position. Until this scenario flips between the two groups I don’t think a huge bull market will suddenly start. One story I read which I consider could be fake news, is that Trump has a surprise for the US dollar in early 2018. Maybe he will try and shock the US dollar back into a bull market? Good luck with that, as it would take a major shift in policy to do turn the US dollar into a bull market.  Most of the time flapping at the mouth will just have a temporary effect. 

Sooner or later the US dollar would have to slice through the top trend line, to help confirm the next larger degree.  One “A” wave support price range could be between 83 and 82, so if Trump has the power then that would be the best time to implement it. 

I will remain bearish with the US dollar until the intensity of the bearish news starts to increase. 

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September, 1, 2017 US Dollar Intraday Bullish Review

About mid August the US dollar peaked and then started a very ugly decline which I can get fit into a diagonal.  The US dollar crossed to a new low with a 3 wave move, not an impulse by any stretch of the imagination. It sure looks like a diagonal 5th wave, followed by a violent reversal right back up again. I show that there is the possibility of another correction still to play out. Straight up moves can be very deceptive, making the “A” wave another potential 4 wave peak as well. 

In the next few weeks we should know more as the USD can resume its bearish trend without pushing to a new high. This would retrace the entire 5th wave decline before it resumes its bigger bearish trend. 

A declining US dollar makes most imports cheaper to buy from the USA, but would certainly increase any inflationary forces already in progress.  True inflation can only happen when wages increase dramatically every year like they did back when I started to work in the forest industry. With pay raises being so low in general today, this will have limited impact on inflation numbers in the future. 

I may rework the “D” wave top I have used, but I don’t want to do that too early as a few other indicators like the COT reports would have to shift first.

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US Dollar Intraday Bullish Phase Review

In August, the US dollar started coming back from a near death experience. It is another example of a very choppy rally that is just a bearish rally as a potential inverted flat. Of course that all depends on where we count from.  This does not mean that the US dollar is going to stop on a dime and then reverse, but it could still need to frustrate us for a few more days. 

When the big picture is foggy, then trying to identify the small wave counts is important, so we know what we think we have. The leading zigzag followed by a small expanded flat and then 5 waves down, now followed by a 5 wave move, that may need a bit more time to complete.

Any US dollar rally will excite the stock bulls, as they are all wishing for the US dollar to start on another major leg up. This is not going to happen until everybody hates the US dollar. Many indicators would have to fall into place before a major US dollar bottom will arrive.  A little bump in the night like we are witnessing just doesn’t cut it, besides stocks would have to play very nice and also confirm the US dollars bullish phase.

Stocks are pushing higher already, but they are all in a choppy rally as well.  We are coming up to some triple tops so they may offer some stiff resistance in the short term. If the US dollar is more bullish than I think then the 95.100 price level would be the next place that the US dollar could find stiff resistance. 

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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 Daily Chart Bear Market Update

For the last 7 months, the US dollar has been in a bearish phase. The USD is now fast approaching that magic 92 price level where we may get a bounce. I would love to see the US dollar take out that 92 price level, as that would help to confirm that the bigger bearish trend is still in effect. Any counter rally could happen so fast we would be left scratching our head, figuring out what just happened.

Longer term I’m bearish on the US dollar. If the rally from the 2008 bottom was one big fake, then a 100%  US dollar retracement to early 2008 levels, would still have to happen.   Many may be thinking that the US dollar is still in a bull market and if so, they would be looking for the next bullish phase to new record highs. That scenario will never happen if the bullish phase to the 2017 peak was actually a fake.

Incidentally, for the entire US dollar bear market, stocks kept right on charging north. This has also happened before, back in the 2002-2007 bull market. There should still be more downside left, but the longer in time, and deeper this present spike gets,  the sooner a reversal may be getting close.

The commercial traders closed off about 3500 contracts of their short positions and if this keeps up, then we could see a net even position sooner or later. It would still take a strong shift to the net long position before we need to be concerned. Commercial interests are not speculators, as they are hedgers and have different reasons why they open or close positions.

It is the speculators that hold all the risk, but both groups are about 3000 contracts from being even. When it comes to any COT numbers I don’t like to see anything even, but rather they should be skewed one way or the other. COT reports work best when there are extreme readings, as even numbers offer little potential future direction.

The mainstream media would also have to come aboard the US dollar bear wagon, where they flood the internet about how bad the US dollar is crashing. 

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US Dollar Intraday Bearish Phase Update.

It looks like the US dollar seems to be resuming its decline. If this is true, then the US dollar will retrace the entire early July rally and break down to new bear market lows.   There is always a chance of the USD just falling short of a new low, then turn and soar past the 96.500 price level again.   Nothing indicates that some super bullish wave will launch a surprise attack on us, as when it does, it can do so when the pattern starts to bunch up. So far no bunching is taking place. 

The commercials are still net short the US dollar by a margin of about 2:1, but when this ratio starts to flip then we should be expecting a big counter rally.  Last week the commercials in gold also added to their long positions, which I see as a positive sign for gold. 

The USD bearish phase will run south until such a time that a totally new bullish phase, pushes the USD to new record highs.  In order for that to happen, the talking heads must all put out bearish fundamentals with a high degree of intensity, before a big reversal is most likely to happen.  The majority has to hate the US dollar like they did back in 2008, then when the consensus is bearish, it will turn and soar the opposite way. 

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US Dollar Intraday Crash Review

The US dollar has crashed since the June 20th peak and has now started another correction. I’m counting the sideways market as a potential triangle, but it could be leading to a diagonal wave 3 of one higher degree.  I would love to see more downside to the US dollar as that will help any gold related assets as well. On a stronger than anticipated counter rally, we might see it bunch up before it moves higher, but that is not what is happening at this time.

I can start this wave count as a small impulse, which usually means a bigger sequence is coming. When the media starts to act like parrots, regurgitating bearish news on how the US dollar is imploding, and ridicules bearish price forecasts are made, then I would expect to see a real strong rally to unfold. Trapping all the US dollar bears in the process. One thing we can count on, is that in any market, participants are oblivious when they are in a bull or bear trap.

Don’t worry the US dollar is not going to implode and fall to zero, as it will soar again once a major stock bull market starts. The 92 price level would be the next major area of concern, but we have a ways to go before that starts to hit the radar screens. The 93 price level also contains a triple bottom, and triple bottoms are always areas to watch in any asset class. 

In the long run, the bearish phase is still on, as it will take a major change in one of my indicators that I track, before it makes a major reversal.  When the commercials become net long, and speculators become net short, then it will be time to initiate another complete review.  I try to review before the markets force it on me. Constantly reviewing is the only way to find better fitting wave counts, which are buried in the past. Creating different wave counts cosmetically will never work, as we have to look deep into the past and make structural changes. 

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US Dollar Intraday Bullish Phase Review

Recently the US dollar has been in a bullish phase. What it sure looks like is that we are in a diagonal, with exact coordinates still unknown. One thing is certain, that once a 4th wave rally exceeds the wave 2 top, the wave count must be thrown out and a reboot initiated. The US dollar could drop, but then another small degree “C” bullish wave can happen.  

A new bear market low should eventually form to help confirm that this US dollar rally is still a bear market rally. Even if we are at a potential 4th wave top, it could all lead into a new wave 1-2.  The resistance line is the maximum I can let this run go too, so it won’t take that long before I have to put this wave count back into storage.  One thing about diagonal 4th waves, is once they dip into the previous wave 2, under no circumstances can it go above the start of wave 2. Diagonal 4th wave rallies have to come to a screeching halt inside wave two, as 4th waves also point to the diagonal wave 1-2 as well. 

There was not that much action last week regarding the net short positions that the commercial traders hold.  When the commercials become net long again, then it is time for a major review of any bearish decline we have. 

Gold has suffered under this US dollar rally, so any decline in the US dollar would be beneficial for gold and silver. 

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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 Bear Market Review

The US dollar has taken a pretty good hit so far, but last week it had started to rally.  I dropped my degree levels down by one,  as I think we would still be too early for any Minute degree wave 1 to be completed.  Besides that late April and early May rally looks too much like an expanded flat, which connects the zig and the zag together. Connecting zigzags is the name of the game when the markets move in a diagonal pattern.  Many times it can take a long time to figure out where in this diagonal wave structure,  we may actually be at.

Being on a wave 3-4 location, could take a little longer to play out, but I like to keep the options open, that the US dollar can resume its decline at any time.  Any single zigzag will always have alternating patterns between the A5 wave and the C5 wave, while the B3 wave can contain just about any simple or complex corrective waves.  Complex patterns are all part of the correction  process, but a single diagonal is part of the 5 wave impulse sequence.

A very smart wave analyst asked me at a face to face meeting,  if a wave 2 can be a diagonal? I didn’t have a good explanation at that time, but if I was asked the same question again, I would say, “No Way”. You can’t have a diagonal wave as a wave 2 correction. Wave 2 corrections require 3 wave patterns not a single 5 wave pattern, as diagonals are part of the 5 wave impulse wave structure.  

The little blue book makes this very clear, but what they only show us, is the ending diagonal. Every diagonal should be labeled, ABC1, ABC2, ABC3, ABC4, and ABC5, so to make it very clear that it is identified as a separate wave structure.

Diagonals cannot always be labeled like this, mainly due to space limitations at these small degree levels. A person could even get away with labeling diagonals with, W, X, Y, X and Z waves, but then the “W” wave must always start as a zigzag.  We can’t have a flat in the wave “W” position, just like we can’t have a flat in the first wave of a diagonal.  

 

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US Dollar Intraday Review

At this time I will stay with a wave 2 top in Minuette degree which leaves the wave count with 4 lower degrees to work with. The single “ABC” patterns are now at the bottom of the degree stacking, based on the EWP 15 degree levels. I will not count out anything lower, but may be forced to change degrees later on. This is not a big deal as constant review will force to fine tune any wave count anyway.  The commercials are slowly creeping up where the net short positions are smaller, but still far away from being net long. Commercials switching to a net long position is not a good sign, but they can continue likes this for a very long time.  My Market Vane report will run out soon, and I will no longer comment on. As of last Tuesday the Market Vane came from a massive 91% bulls so when that also comes to an extreme, then we will have a bearish decline problem.

In the meantime the downward pressure should continue.

 

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US Dollar Intraday Review: Not a New Bull Market!

 

The US dollar  is soaring and is doing what I hoped it would. The US dollar doesn’t need much more upside, before it will close off that big gap you see.  With a bit more of an extension, this should complete by the end of the week or even sooner.  Any price level above 99.750 should do it, but there is never any guarantee that there is more momentum to the US dollar than meets the eye. 

The fact that it has gone vertical helps, because these vertical types of moves can never be maintained.   I changed the wave count to a potential 4th wave rally, but I always have to stress that they are diagonal moves, with impulse waves being very small runs.  The rally  that has started on the 7th of May sure fits into an impulse very well, but It is still part of a potential “C” wave. 

The main thing is, that it would be nice to see this US dollar gap starting to get closed off, as if it is left open, the gap creates too much uncertainty as a future surprise rally could always happen.

I’m sure we will see more gaps in the future, but at this time we are staring at one of the biggest holes in the charts. 

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US Dollar Intraday Review

 

 

Everything about the US dollar wave count is under suspicion of being wrong in the short term. The rally last week, fitted a single diagonal very well, which would be the “A5” wave or the leading 5 wave sequence. We would still need the “C5” wave,  which would be the trailing set of 5 waves in a zigzag. 

The worst case scenario would be that the US dollar blasts up to new record highs, which would make the wave 2 peak a potential “A” wave of the same degree. 

I will work some alternates with a bigger time period offline, but for now all the older wave counts will remain.  

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US Dollar Intraday Review: Will The Top Hold?

 

 

This US dollar rally may have topped out on the 9th, which was followed by a pretty good looking impulse decline so far.  Technically, we want to see this decline continue if the rally was just another fake.   Diagonals should still be part of the bigger picture, but so far the US dollar fits into an impulse just as well.  If the wave 2 top in Minute degree holds, then there will be no support except for short duration counter rallies only.

A move below the wave 1 bottom is what we need, to confirm that this rally was a fake bullish phase. There will still be many fake rallies to come, and some of them can be pretty good surprises. 

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US Dollar Daily Chart Bear Market Review

 

 

I believe that the 2017 peak in the US dollar was a major bull market high.  This peak has held, and if we’re lucky it will continue to hold.   Any potential “D” wave peak is a fake bull market and one of the biggest bull traps we can come up with. Of course, time is the only thing that will confirm this, but so far a potential wave 1-2 in Minor degree has already formed, and the next  wave 1-2 in Minute degree should be near completion as well.  I always look for the first wave 1-2,  to be the shortest and in this case the US dollar chart fits the bill. 

If I gave you a bunch of support price levels, then, you have to ask, “Support for What”?   In a bear market, there is only temporary support, and if your lucky you may catch a counter rally or two.  In the end all support will get trashed, until the US dollar bear market is drawing to a final conclusion.

This may still be a few years away, but when solar cycle #25 arrives all US dollar bearish bets will no longer work, as we should then expect a major reversal. 

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US Dollar, A Look At The Daily Chart.

 

It is important to always look back to see if the present pattern still makes sense. Spending too much time at the intraday levels can distort things pretty easily, so we have to step back, and look at the patterns from the daily chart perspective.  First thing in 2017 the US dollar bull market ended, and I believe that the inverted wave 1-2 in Minor degree has completed,  and we could be close to the completion of wave 2 in Minute degree. 

First waves are always the shortest waves, but if you think we have a long wave 1 then chances are good it is just an “A”.   Any support will be nonexistent as bear markets only give us temporary support at best.  The “D” wave top in Primary degree is still holding, and the further the US dollar declines, the less of a chance we have of the “D” wave being dislodged from its position.   Any ‘D” wave top usually retraces its entire bullish cycle, as it would eventually have to crash down to an “E” wave in Primary degree location.  It would take an Intermediate degree zigzag to get us to the “E” wave bottom.  The “E” wave bottom would also land on a potential Cycle degree 4th wave, so until then the US dollar is in a bear market which is  now just a bit over 3 months old. 

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US Dollar Futures Intraday Bear Rally Review

 

 

The rally in this US dollar futures chart has gone a bit higher than I would like to see. This calls for an instant recount from our last high, which is a wave 2 location in Minor degree.  Once I looked at the decline as a single diagonal, then chances are also good that we are one degree higher in Minute degree.

The last declining zigzag was a dandy as it ended up just about even in physical length as well. If wave 1 in Minute degree is this long,  then we know that a lot more downside should still come.  This is not the start of the return of the US dollar bull market as it died 3 months ago. There is a very good chance that the 2008-2016 US dollar bull market was a fake, which can be any “D” wave top. “D” wave tops are bull traps in any language you want to use, as they will collapse into an “E” wave bottom. In this case a Primary degree “E” wave bottom.  We are still 2-3 years away from this being played out, so be prepared for one wild ride. 

At this time the commercials are still net short, so until they become very net long, then the bigger bearish trend,  should resume. 

The Primary degree “D” wave top has been holding for 3 months now, so I see that as a very good sign as well.   Just like a bull market is impossible to stop before its time, a bear market will not stop until it is ready to do so. We will still get large US dollar rallies, but all of them will also end up being bull traps. 

The problems will come after we see 5 waves down in Minor degree, as a potential “B” wave rally will put all the dollar bears in a temporary bear trap. They will not survive this,  as not too many traders can ride out a potential Intermediate degree counter rally, which could last many months.  

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US Dollar Counter Rally Review

 

 

The US dollar has executed a nice rally  and has just about gone far enough for a single zigzag bounce.  This sure can fit into a 4th wave rally, as any gap we did have has been closed shut. This is all good, and the next leg down should produce some more US dollar bear market lows.  Wave 3 seems to be an extended wave, but the 5th wave can also get extended. Two waves in 3 of the impulse waves  can always extend, but never all three of them.  For the 5th wave to finish before the end of the month is going to be a bit dicey as we are running out of time. 

We can end on wave 1 in Minute degree or wave “A” but there should still be lots of downside to go, with the US dollar.   Can all this go sideways with a triangle type pattern? Sure, it can but this may still be low on the list. Any triangle may fit much better in the 4th wave of Minor degree, but the triangle would be the least of the worries.  We also would be expecting a “B” wave rally, which itself can contain an expanded pattern.  It could turn into a complex pattern, that will keep us scratching our heads the entire time. 

Long term, we need a zigzag in Intermediate degree for the US dollar bear market to be completed. This is still a few years away, as we need to find the first set of 5 Minor degree waves first. 

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