Loading ...PM Rally – High Probability We Surge From Here
I’m going to let the charts speak for themselves. Especially the last one. I don’t know what the catalyst will be, but I believe the dollar is exhausted and will fall rapidly now. Perhaps a realisation that we’re nearing the end of this rate hike cycle and we haven’t even got close to escape velocity.
Great stuff NS. Thanks as always. You’re always a shot in the arm!
It would appear the dollar’s DC may have topped on Oct 9 at day 12. If so, it’s a bit early and probably doesn’t
bode well for the dollar. It’s so important to keep an eye on the dollar now because the competing theory that a lack of dollar liquidity will cause the dxy to surge is compelling. So far we’re not seeing a sign of that and I remain in the commodity cycle rising camp.
I agree, the dollars behaviour is very important- it should be a sign of the realisation taking place if the current series of rate hikes is nearing an end.
Thanks Northstar. Hard to believe people would be fighting to get pieces of green paper.
On a larger time frame, regardless of any short term rallies, the dollar is looking like its nearing the end as a global reserve currency.
“regardless of any short term rallies” IMO, more of that soon. And that seems likely to me to bust your primary thesis. Next week or two, PMs continue higher. After that … I’ll be flipping short again.
“On a larger time frame … the dollar is looking like its nearing the end as a global reserve currency.” Yes but there has to be an alternative that’s functional. That doesn’t exist ATM, and isn’t real close either. (And don’t cite to SDR, as that’s just a basket of the mostly non functional existing fiat confetti currencies)
And it doesn’t have to be the dollar rallying.
It can be the euro crumbling, say due to events like these:
“This Is An Earthquake For Bavaria”: CSU Suffers Stunning Defeat, Loses Absolute Majority In Worst Result Since 1950
https://t.co/ha8rzfBe87
This is a big deal. Merkel’s days are numbered and she is effectively holding the EU together
https://t.co/rbaevBqLvh
Nope, if anything it strengthens Merkel for the time being. Probably only short term but, anyways, for now she’s got the crony ‘corrupteers’ 😉 from the CSU where she wanted them all along. From the very start Bavaria (CSU that is) has enjoyed a completely out-of-whack share of power on a federal level.
Good thing is the proto-fascists from the AFD didn’t make a serious dent as of yet. If the still-main-stream parties CDU, CSU and SPD decide to re-orient their policies to meet the interests of the little guy again, at least to a certain degree, then the AFD will be reduced to a historical footnote in a heart beat.
AFD = Pied Piper. Mrs Weidel’s (head of AFD and MoP) residence is Biel/Switzerland for financial reasons. Ha! MoPs’ in Germany are exempt of taxation of a great deal of their remunertion – talk hypocrisy.
In 2009 the then head of AFD (Lucke) proposed a bill to finance bank bailouts via wage cuts for the blue collar fraction – Pied Piper again.
It matters not Pedro. Dollar bulls and dollar bears can cite dozens of reasons why they are right. All it really needs is a collective realisation that rate hikes are nearly over. The naked Emperor will be there for all to see and the dollar will march towards the 65 to 70 region. Alternatively I’m wrong and the dollar soars above 100. This isn’t an arguament. This is where we present our views and opinions backed up with sensible chart analysis. As I’ve said many times, I may not be correct, these are my views. That is all.
Dollar needs to break the trendline to gain the confidence (i.e. $94).
Agreed 🙂
Appreciate the periodic posts!
I like that last chart best.
But I’m from Misery 🙂
Looking at the FBO chart in isolation…you would agree its more likely setting up for a backtest …if we hit your line and bounce down that’s not good…right ?
The FBO chart could indeed be no more than a backtest in a bear flag (half way to the downside ?). Cycle work, COTs, multiple technical indicators and the fact I believe the realisation that further rate hikes will tank the economy, all point to it being a false breakdown on that chart. There are multiple other ways of drawing the gold chart that are bullish – inverse head and shoulders and my own ’rounded bottom’ to name but two. I see the chances of this being a major low as very high, but there is still a possibility we fall to $1000 or less. I just regard that outcome as very low probability.
Great charts and analysis dude! 😉
The 200wma on the Weekly chart needs to continue to provide resistance on any rally and right now I have the USD starting its move into a short term low (TCL/DCL) and where that low forms will be key to next steps.
Thanks. Indeed Surf. I bow to your superior knowledge on the fine detail cycle work. The dollar has already surprised me with its recent rally. Its constant failures and weakness in the 95-96 region seems telling though. These are fascinating times to be analysing these charts.