Loading ...The Devils Advocate Chart
Lets Face it…Every one here and every one every where is bearish on the Dollar
The Long term Cycles have spoken and the Dollar is Doomed !
Even I am Convinced from Spock and Northstar and Graddhy and others …that POS has NO life…It looks like crap….lower and lower and lower …no end in sight
BUT …what IF ? Its a 17 year Top Cycle and not a 15 year Cycle.
Which Top is THE Top in the middle series here ? There was a triple Top in and around the turn of the century
Using the third top ( 2002) from which the dollar dropped hard…the cycle is 17 years ( like the Cicada) and looks like this
And what about that fractal and what about that breakout and what about …especially …that 1 year cycle low ?
Not to mention a 50% Fibo retrace right here and that 200DMA.
I sincerely hope I am out of the loop with this…as I am locked and Loaded with Rocks
But Not nearly as comfortable as all you guys
It’s a good point Fully. Getting the best fit with the dollar cycle and gold cycle does have room for error. However, having looked at it carefully I believe the dollar cycle has indeed turned in sync with the gold cycle turning up – you can’t really make the gold cycle fit if you try and stretch it any further into the future.
Tricky chart.
Maybe it’s my own bias, but I don’t see any reason for the dollar to keep rising…whether it’s DXY or USDJPY. Tell me if you can think of any.
From a central bank & interest rate standpoint – we’re ahead of the rest of the G10 countries. What do I see in the future? ECB tapering (bullish euro – largest weight in the DXY), BOJ tapering (Bullish Yen & gold). At the same time, one of the fed members floated 2.5% as a normal non-accomodative target on Friday. That means 5 hikes total remaining – and the way they’ll be spread out won’t be bullish USD, it’ll keep it range bound at best, IMO.
In the shorter term, yes DXY and USDJPY have fallen 10 & 5 points straight down, respectively. Which is why I’d be more comfortable waiting for a bounce before getting fully positioned. But we still have the debt ceiling hanging over our heads, which could help us ride out a currency bounce in the shorter term.
But again, to the point of the gold bulls, if you pull up a monthly chart of DXY & USDJPY, neither are oversold on that time frame – bollinger or RSI wise. So if you’re playing the longer game here, just hang through the chop until it hits your stop 🙂
The world’s reserve currency rises during a credit contraction (not enough dollars to go around). That would be the main driver of the dollar going higher.
When I said “we’re ahead of the rest of the G10”, I meant the USA. Forgot not everyone here is from US.
Thanks.Good points.
Fully, Remember that Cycles only give you a reliable time band to measure Low to Low on all time frames. I have never found them useful in forecasting a market top in any market. In the standard 5-6 month Intermediate Cycle that is bullish for example, I will start looking for signs of a top near the 3-4 month mark to harvest profits. Hope this helps… 🙂
Agree. The cycle is 30 and 15 years harmonic, low to low. However, given that USD is in a bear market for the last 60 years, its unlikely we get very right translated 15 year cycles appearing. 2017 is year 9 since the low in 2008. That’s as good as it gets in a bear market.
60 years is a long time Spock…That is a concern …is it not ?
I mean Bear markets do bottom and usually before 60 years. I do appreciate where you are coming from and I do see
all your charts and cycles are pointing down..and I am loaded with Rocks….Its just that I don’t see this going
straight down .Especially with this 1 year cycle bottom shown on this chart.
Its all about China and Asia going forward. The center of finance is moving away from the USA, and its currency, and it has passed its peak, in economic terms. Its a downhill slide, lower standard of living for its people, high public and private debt burdens, and an increasingly dysfunctional government. No longer will the country be able to live off borrowings from outside the USA. Time to face up to reality and take some responsibility, or descend into chaos.
Yin and Yang. order and chaos. The Chinese know all about that. Clearly, the USA does not.
The people fiddle in their cubicles, whilst Rome burns. Sorry if this offends any USA readers, but you guys need to face up to reality, and do something about it, before it is too late. Its nver too late, but the longer it festers, the bigger the job to fix it.
Playing devils advocate here, but doesn’t china have more debt-to-gdp than USA(and many others?), not including the shadow debt. So i dont buy your argument. All countries are guilty of running up insane bills. Doesnt chsnge my outlook on the USD here though.
I’d be interested in seeing EXTERNAL debt to GDP ratios.
Japan is more deeply indebted, but its mostly internal IOUs.
With its mfg sector, the Chinese can pay down some of their debt over time.
But yes, its systemic and very few aren’t guilty of joining in on this party.
China has Gold while US has *none*? Will that tip the scales in China’s favor? Not forgetting China is also the biggest manufacturing factory in the world?
When america sneezes the rest of the world catches a cold.
No offence whats so ever from this nearly EX US citizen:-)
One more point..when we talk of the Dollar Index…we are not talking about China or Asia ( well japan is in there but only 13%)
The Euro plus Britain make up over 50% of the DX…so its really a case of which of these currencies is the flavor of the day as they are all flawed. I mean Europe ? That’s a good place to hold your wealth..with bail ins and such ?
The Yuan is not part of any important currency index that I know of…and it is Attached to the Dollar…so when the dollar falls so does the Juan vs the Euro and Yen ….that’s a little weird
Fully, you might find this being of interest to you, in case you’re not already aware of the situation across the puddle (from a european perspective).
http://www.nortonrosefulbright.com/knowledge/publications/155431/a-comparison-of-bail-in-regimes-part-1
Thanks Bertone…wow what a convoluted process BUT it looks like regular bank accounts are not subject to bail ins
Do you think that is correct ? I cannot follow most of this other than that one key point
I didn’t check properly myself, after all it’s about you canucks:). But, if this thing goes the european way it’d turn out to be exactly the other way round. Over here a holder of a regular bank account is by law considered to be an unsecured creditor, and thus will be prone to bail-ins. Here, you better buy a sh*tload of options ( harhar ), at least that gives you the legal status of a secured creditor, just in case there’s troubles with the issuing entity! In short, gambling beats saving. Nice, eh?