This is just a small snip of this in depth report for members.

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With the unprecedented amount stimulus going into the economy many investors are wondering if it will bring on inflation. So far all the stimulus from the 2008 crash to the present hasn’t had much of an impact on the inflation rates as most commodities have been moving lower until recently. March 2020 will go down in the history books as one of the biggest inflection points the markets have ever witnessed. Most of the stock markets, PM complex, and many commodities put in an important low while the US dollar put in a major high.

Let’s start with the weekly chart for the US dollar which shows a possible horizontal trading range building out. The price action has completed 2 compete reversal points with the 3rd one now in progress. There are several different possible scenarios that could play out that we have to be aware of.

The first scenario could be that if the US dollar fails to make it all the way down to reversal point #4 and puts in a higher low we could see a triangle forming. If the US dollar does in fact declines to the bottom rail at reversal point #4 we could then see a possible rectangle building out if the bottom rails holds support. A possible 3rd scenario would be if the bottom rail at reversal point #4 fails to hold support and the US dollar breaks through to the downside we could see a rather large double top reversal pattern. For now these possible scenarios are just something for us to watch for.

Next lets put the possible rectangle in perspective by looking at a 12 year weekly bar chart for the US dollar. The US dollar traded in the confines of that 2010 bull market uptrend channel until just recently when the price action broke below the bottom rail just 2 1/2 months ago in August. Three weeks ago the price action backtested the bottom rail of the major uptrend channel around the 95.0 area. What makes the bottom trendline so important are all the touches from the top side as it did its job of holding support. If you look at the right sidebar you will be able to see a small gap below the bottom rail of the uptrend channel which is hard to see but it is there. I’m also being pretty liberal with the backtest to the bottom rail which is really more like 95.00 or so. The bottom line is that I have to remain bearish on the US dollar until it can break back above the bottom rail to negate the breakout, below is bearish and above is bullish.

Full report for members

https://rambus1.com/2020/10/14/quarterly-report-commodity-sector-part-1/

On a Personal Note I can tell you that after being with Rambus for over a decade and considering myself a Student of Chartology …I am still a rank amateur compared to the Wizard.

His Charts are unique , the likes of which you cannot find anywhere else on the www IMBO .

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One More to complete the dollar picture …a bonus to Goldtent readers for “enduring” so much political content tonite 🙂

Lets really put that 2016 trading range in perspective by looking at the 50 year quarterly chart for the US dollar. If you were with us back in 2014 you should remember that massive breakout from big base #2 which was a fractal of big base #1, and the impulse move that followed. Even after all these years the top rail of the 30 year falling wedge has done its job of holding support. Again, what had been resistance turned into support once broken to the upside. From this perspective the US dollar is trading in no man’s land.