Friday, February 5, 2010

DOLLAR DANGER ZONE update I

If you are going to be a trader ya gotta know the game.....These are your considerations. Educate yourselves and recognize the risk is still high to the market and the miners...

In terms of the dollar, we have a daily and a weekly buy signal in effect. Thus the current outlook on the dollar still remains rather bullish. On the Euro, we have a weekly sell and a daily sell signal in effect and so the outlook remains bearish. It could potentially trade all the way down to the 125 ranges. If the dollar should issue a monthly buy signal, the outlook for the dollar will turn extremely bullish, and it will be a sign that Gold could potentially correct/consolidate for the next 7-9 months before mounting another strong rally. This in turn will increase the odds that the entire commodity’s sector is going to experience a rather strong pull back. The current action in Copper and the oil markets indicates that all is not well and the other sectors could soon follow their lead.

http://news.goldseek.com/TacticalInvestor/1265390280.php

Update....EWI from TB

"The longer-term chart of gold’s wave structure is as suggestive of a big draft lower as those of the dollar and euro. On Wednesday, it looked like gold might want to dance back and forth across the trendline that supported the rise up from October 2008, but the pull away from this level over the last two days is very visible on the chart. The wave ii (circled) high at 1126.20 should hold and lead to much lower levels. If a wave (ii) rally is in effect, it should hold below $1106 and lead to even more furious selling in wave (iii).




[Silver], with its blast down and out of the trend channel that carried it up from the $8.39 low of October 2008, is the star of the show. The brevity of its early February correction and the force of its decline through the middle of trading today are a first taste of the decline we expect across the breadth of the financial markets. On Wednesday, we were looking for the mini-silver contract to carry to the $17.12-$17.27 area, but its inability to breach the $17 level, followed by such a quick drop through the $16.02 support level, $15.99 spot, suggests powerfully that silver’s bear market is back. If the latest steps lower are any indication, and we believe they are, the trip back to $8.39 should be quicker than that of wave (1). Silver spent much of the last several weeks clanging back and forth between support and resistance in the $16 to $18 range. We do not expect it to make it back into this range. The wave i (circled) low just below $16 should hold and lead to much lower prices. If it surprises and returns to its former haunts, the wave 2 high at $18.92 should hold."

9 comments:

  1. This is from EWI...You guys know I'm short silver via ZSL and holding puts on the SLV...I'm posting this update...you guys be careful! Thanks all! TexasBlondie
    "The longer-term chart of gold’s wave structure is as suggestive of a big draft lower as those of the dollar and euro. On Wednesday, it looked like gold might want to dance back and forth across the trendline that supported the rise up from October 2008, but the pull away from this level over the last two days is very visible on the chart. The wave ii (circled) high at 1126.20 should hold and lead to much lower levels. If a wave (ii) rally is in effect, it should hold below $1106 and lead to even more furious selling in wave (iii).




    [Silver], with its blast down and out of the trend channel that carried it up from the $8.39 low of October 2008, is the star of the show. The brevity of its early February correction and the force of its decline through the middle of trading today are a first taste of the decline we expect across the breadth of the financial markets. On Wednesday, we were looking for the mini-silver contract to carry to the $17.12-$17.27 area, but its inability to breach the $17 level, followed by such a quick drop through the $16.02 support level, $15.99 spot, suggests powerfully that silver’s bear market is back. If the latest steps lower are any indication, and we believe they are, the trip back to $8.39 should be quicker than that of wave (1). Silver spent much of the last several weeks clanging back and forth between support and resistance in the $16 to $18 range. We do not expect it to make it back into this range. The wave i (circled) low just below $16 should hold and lead to much lower prices. If it surprises and returns to its former haunts, the wave 2 high at $18.92 should hold."

    Next Update: Monday, February 8, 2010.
    --Peter Kendall, co-editor, The Elliott Wave Financial Forecast.

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  2. OK one more, tonight's dollar and euro update..."Here’s the dollar comment from Wednesday: “Today's sharp advance in the [U.S. Dollar Index] could mean that the rally is extending immediately.” The same goes for yesterday and today. The Dollar Index’s spurt above 80 signals very clearly that our wave count calling for a third wave rise in the dollar is accurate. It is either extending in a small degree first wave or entering the middle of that third wave, a position that could propel it toward key resistance of 90 in relatively short order. In either case, the action off the lows is still just the uncoiling phase of a surge that should last for some time. We still need more subdivision to offer a definitive short-term count, but the dollar’s momentum in accordance with the longer-term pattern now confirm the forecast calling for much higher prices through 2010.




    The [Euro]’s corresponding plunge in the opposite direction also confirms this view. The main trend for the euro is down, and this is affirmed by the relatively short and shallow retracements within its decline. The rallies against the main trend are so small its hard to get a fix on the count, but we are more convinced than ever of the likelihood of a deep thrust lower. In fact, the euro’s plunge potential is probably even stronger than the dollar’s rally potential. The red line on the chart shows that unlike the dollar, the euro’s wave 3 has already crossed the extremity of the preceding wave 1. The Dollar Index should follow with a break of its own wave 1 (at about 82.50), but the euro’s first strike shows that it’s actually leading the way." From EWI..TXB

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  3. Yup if this game were easy we would all be rich....good posts TB

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  4. Analyze MTL played well. It also helped with my lesson on patience. hehehe.

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  5. Excellent Temo, if you played it on appearance alone when it had the early backtest, without the SPX context it would be easy to be punched out for a loss on that one. I hope no one who reads this blog got surprised by the short covering at the end with the posts we had last night warning to drop shorts at least an hour before close. Monday should be a wild one too...not a game for the faint of heart or dull in T/A, that's for sure. I'll be re-assessing things this weekend to set some bounds for next week, having a tight framework and conviction is the lynch-pin of patience, have to believe in your premise and be willing to fall on your own sword (stop out) if you whiff on the analysis. I think we all struggle with patience, it is the natural enemy of greed and pride. Great trading day. - Analyze.

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  6. held my jag and slw. getting close to shorting XRA again. I am watching SPX 1070 for a failure and then the drop to 1040/30. The chop in between is dangerous unless your Joe hahehe

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  7. Where is the stagflation Kli?? Where??

    Gold dropping, housing dropping, asset prices dropping, and we will see what kind of pricing power everyone else has (health, education, etc, etc). I don't think you need to be a trader to see that the dollar is poised for a spike up. Unfortunately, gold and all other commodities will suffer as the credit is take out.

    Dny

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  8. Dny appears to have a penchant for the boys, one of those homersexuals trying to get attention.

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  9. Lance Roberts from Streettalk Advisors in Houston puts out a weekly newsletter which is very good. It's worth a read.

    http://www.streettalkadvisors.com/XFactor/020610-All-About-Credit.pdf

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