The recent two week rally has now relieved the oversold conditions and in the process the dollar is about to hit the brick wall of a declining 200 week moving average. It's already bumping up against the intermediate dow trend line.
The dollar is now short term overbought, in a strong down trend, is pushing up against solid resistance, in a secular bear market, is caught in the grip of a left translated 3 year cycle decline, and in the early stages of a dollar crisis.
I don't like the dollars chances of pushing significantly above 80.
As soon as the dollar resumes its collapse into the 3 year cycle low I expect we will see stocks and commodities resume their upward advance.
the only thing that has given the dollar any relief recently is that the euro looks so bad by comparison in the latest news. once people digest the latest from the across the pond, the dollar will start sliding again.
ReplyDeleteYou are predicting the same as me! Thank you for your graphs and if you don't mind I would love to reference your article from my blog.
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Scott J
http://thehardrightedge.com
Sure go ahead.
ReplyDeleteGary,
ReplyDeleteThere is a rising wedge on weekly gold with overhead resistance at 90.
What's your take on it?
I think people see way too many wedges on chart patterns. I swear I often see technical anaylist call a wedge and most of the time for the life of me I can't see it.
ReplyDeleteIt's a catch all pattern that can be used to justifiy just about any bias and is completely worthless in my opinion.
Just stick to cycles, sentiment & fundamentals. All of which are saying that gold is due to put in a short term bottom any day. (As I write this it is looking more and more like it has put in the bottom of the cycle.)
I agree with your assessment of the dollar and have a different chart in a blog post at the bottom showing a resistance downtrend line. The Euro "crisis" did serve to relieve the incredibly bearish dollar sentiment too... http://www.monetaadvisors.com/2010/11/15/convince/
ReplyDeletehello GARRY: what its effect on commodities like gold silver copper they will rise or fall.
ReplyDeleteGold is in a secular bull market. Bull markets go up.
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