Loading ...Halloween is Coming
This is a Very Scary Chart for those of us looking for a New Gold Bull Market
IF this fulfils its back the drawing board .
A breakout of a long term trendline with sufficient back testing to launch to the PO .
This is too good a chart to ignore unfortunately if you are bullish medium term.
“purdy” FGC!
http://stockcharts.com/h-sc/ui?s=%24USD&p=M&st=1982-12-18&en=today&id=p28332204770&a=433707269
http://stockcharts.com/h-sc/ui?s=%24USD&p=D&yr=5&mn=11&dy=0&id=p77890845394&a=265472750
http://stockcharts.com/h-sc/ui?s=UUP&p=W&yr=7&mn=0&dy=0&id=p27154433935&a=313192381
With all due respect, why does it necessarily have to be especially scary?
I do not want to argue against the chart or the interpretation here. I will also gladly concede the strong tendency, shown over and over again in many epochs, for movements in the USD and Au to be approximately inversely correlated–moreover that there are well known explanations for this inverse correlation.
Nevertheless, why can’t the USD and Au move more or less together in a given epoch? For example, can’t there be times of panic where both are clung to as if talismans since both have reputations for being in some sense “strong” and dependable? Or times of confusion or near paralysis where one doesn’t know what else to do so one sticks to two different somethings that have held some value traditionally (in the case of the USD not so well but not as badly as other things, for decades, and has had a lot of good press for being stable; and in the case of Au something that has done well for rather longer if one holds long enough)? Or why can’t they both go up together for no particular single reason? For that matter, is it absolutely proven that they both couldn’t and wouldn’t be manipulated upwards together ever at least for a while, whether by overt decree (“fiat”) or surreptitious purchases?
(I have no fixed opinion on what will happen. I have a significant bet in place on PM stocks. I assume a real possibility they may plummet or just fizzle downwards if the USD goes up, but to some extent even if it goes down.)
Thanks for indulging me for thinking out loud. Sorry.
During the great depression GOLD and USD moved in same direction.
The answer to one question tells me where the dollar is going. Can the US stock market withstand a rise in the dollar past last December’s highs (this includes a Fed rate raise which will have the same effect)? Two forces are at work to prevent the dollar from achieving new highs 1) China response to higher dollar (devaluation of yuan) which induces market turbulence 2) Avoidance of further decline in Fed credibility (for anyone still believing) – dollar strength will steal fed’s thunder of a Dec rate raise. I’m looking for a dollar smashdown of some form (or an oil aka-petrodollar smashdown instead – likely the former IMO) and if those don’t take place the US SM is the last place I’d want to be. If the dollar does break to new 2 year highs it will signify TPTB have lost control.
Just for the record as I revisted this post (of course no one will read this far back) – I meant to say “….(or a huge inflationary spike in the petrodollar instead…” Dollar devaluation or Petrodollar spike higher = same effect on the world value of USD denominated debt.