3 weeks, that's how long the bulls have left before stocks roll over and begin the next intermediate degree decline. That being said, the next 2-3 weeks should yield some very healthy gains in virtually all asset classes. Why is that you wonder? Well, it's because the dollar has begun moving down into an intermediate degree correction which will, in the next few weeks, fuel the 'risk-on' trade.
As of Friday the dollar was on the
11th day of its current daily cycle. The normal duration of a the dollar index daily
cycle is 18 to 28 days, with the average being about 23 or 24 days.
This suggests that the dollar should bottom somewhere around
August 21st or 22nd. As you can see in the chart below whenever the
dollar moves down into an intermediate degree trough it generates
strong gains in asset prices.
What follows, once the dollar bottoms
and its next intermediate degree rally begins, is not going to be
pretty. Stocks are going to start to struggle and ultimately move
down hard in September and probably October if the Fed doesn't
unleash QE3 at the September FOMC meeting.
By the end of August and certainly
by the time we get into September the markets are going to call the central
bankers bluff, and it is going to take more than words and the
threat of quantitative easing to keep asset prices propped up.
I have covered the rest of the forecast in depth in the weekend report available to premium subscribers.
I will again offer the $1 two day
trial subscription to traders that would like to sample the premium
newsletter. If you decide you would like to continue having access to the daily and weekend newsletter after the two day trial, it will automatically convert to a monthly subscription when your two day trial expires. If you decide the newsletter isn't for you just cancel
your subscription by following the directions on the homepage before
your trial expires.
Click here to access the premium newsletter subscription page.
Only new subscribers are eligible for the trial. If you were a previous subscriber and try to register for the trial it will trigger a monthly subscription and a $25 charge.
Offer is now closed.