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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