Charts of the Day – USDU
USDU is a bullish dollar index ETF. 31.37% of its weighting is the EURO. The more commonly used bullish dollar index ETF is UUP. 57.60% of its weighting is the EURO.
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Good point Gary. Perhaps you could put up a chart showing the dollar’s performance versus all other currencies without the Yen included.
I’m not sure how one would go about constructing that chart.
https://likesmoneycycletrading.wordpress.com/2016/10/23/stealth-dollar-low/
“….compared to all other currencies…” more detail please. Which currencies are you referring too where the dollar has been weaker?
If I assume it the correct way, I would say…all currencies that are not entering an intermediate cycle low like the EURO right now.
……………………………
On a side note: PMs have been a bit on the run again in European markets this morning…
Gary, that USDU chart is a thing of beauty. Thanks for posting it. Just look at the bowl formation that began in January this year. No way in hell is that going to break down anytime soon. I had been wondering about why your dollar calls were not working and I think its just that cycle counts do not currently work for some reason. The counts are stretched way too far so that must be tipping you off that something else is taking place. That USDU chart is really bullish dollars and therefore negative gold and miners. So this is not to criticize but just to point out that maybe another approach is better for awhile. Since your dollar top call back on September 15th the US dollar is up almost a nickel and gold has fallen 100 dollars from 1350 to 1250 give or take. It is going to get a whole lot worse too (or better depending on how one see it) given the shape of the USDU chart you posted today. Many thanks man.
Anyway, yen is forming a continuation pattern bear flag as I see it and when it breaks the direction should be down thus warning that the negative pennants on gold and silver will also lead to fresh declines lower. At this point we have neither a breakout or breakdown so I won’t bet either way but we are getting close to a decision now in yen, silver and gold. The move that follows will be significant whatever it is going to be given the length of time this pattern has taken to form. Caution is warranted in the interim unless you are just a plain old gambler!
Well if one wants to use a plain ole technical approach the technicals have turned up for the metals on a daily basis and are severely oversold on the weekly charts.
I wish it was that easy. Its why I mentioned it. There is enough conflicting technical data that both bear and bull cases seem to have equal weighting right now. When that happens I try looking elsewhere for confirmations or violations. In this case the Yen is helpful as is Euro and Dollar. Don’t you agree that the DC counts on USD did not work out though and we have a bad signal? I am not blaming you Gary. Something else is in play that’s all so we need to look and try to understand what it is that’s happening under the surface.
Here is an example. There is an impending death cross on gold on the weekly. How do we square that away with all the talk about gold breaking through the bear market barrier? It just won’t happen. Not this year anyway.
http://stockcharts.com/h-sc/ui
Change the chart to weekly to see what I mean. Seems it wants to default to a daily.
Last comment. The CRB is rolling over and is going to retest the lows. That is also a great chart. Again, I appreciate your post today Gary even if I see the opposite outcome. For the moment I would just say throw out the book on cycle counts and focus on that USDU bowl because it says it all.
OK, one more. Does anyone here think that copper is about to break to the upside? Please raise your hands if you do. The daily is a beauty of a chart for a copper coil just waiting to unleash itself. Quite a few coils coming all at once in fact so some thing is going to set them all free at the same time I suspect. This interminable waiting will not go on forever. My sights are set on a dive in copper though and its one more nail in the bull case for precious metals. It is times like this that we all need to take care not to assume too much though and just let the market come to us. I think I know whats in store but I have certainly been surprised in the past. Usually its when everyone else sees the same patterns and then we all get to be wrong together!
The S&P has tried multiple times to move down into its ICL. Every time it gets rescued.
This is why I will never short the stock market, at least not until it forms the next parabolic bubble.
As long as the Fed has a printing press and is allowed to use it stocks are going to be dangerous to short.
I can relate to that. There are days Gary when I don’t know whether to spit or wind my watch. I have been having a lot of them lately where some markets are concerned. For example I was sure that LABU was a buy just recently and then it plunged deeper than I had expected. Happily I was still on the side waiting for a decent bottom to form. We are getting closer though and price has improved substantially. And the upside should take us for a double this next go round.
Practically every major stock market in the world is being “rescued’. I think there is something going on than just interventions by the FED, if they are occurring at all.
SPX=2152
Covered my SPX short.
SPX is set to continue its dead-cat bounce over 2170 before producing lower lows in this yearly cycle.
Holing my long positions in gold & treasuries intact.
I show that Gold, Silver and GDX are all still chopping in Bear Flags for now. All three are testing my lower Flag line but have not broken down just yet but if they do, that is where I will exit my recent longs and go short again.
I have Gold on day 11 and of Daily Cycle 4 or 5 so it needs to get a move on here if it is going to move higher as it is wasting precious time chopping in a Bear Flag.
https://goldtadise.com/?p=384596
I will join you if I get the feeling that gold still has one more daily cycle down. Too early to tell today though. So far it’s just a normal test of the 10 day moving average.
Agreed that nothing is broken so far but the chopping in a Bear Flag is not very bullish, IMO.
Price needs to get moving here and soon if this is just a half cycle low for Gold.
Let’s call a spade a spade.
Gary nailed the top call in USD exactly like how I nailed Megan Fox last night.
Eventually his 18th call will be right…although I am still unlikely to nail Megan Fox.
Now that’s a funny Duck…. 😉
Yep I missed that one by a mile. I don’t recall ever seeing a daily cycle rally this long.
You are a good man Gary.
Anyway, don’t sweat it. The dollar has most of the planet baffled. That damned euro project is one weird work in progress. They are dragging that old sack out to the bitter end of its useful life so it just makes sense that currencies would start going haywire in response.
I still think we get a euro crash btw. It may have already begun. And that means an even bigger move up is still coming for the dollar defying all cycle counts and almost all other technicals.
Not sure if anyone follows this much but the Canadian dollar has signaled today that in all probability its going to fall off a cliff so we can kiss a continuation of the crude oil rally good-bye and think of getting short instead. Check it for yourselves on a daily chart. That CAD drop looks very ominous to me.
Good Call!
http://www.zerohedge.com/news/2016-10-24/loonie-soars-after-bocs-poloz-says-fiscal-stimulus-has-eased-pressure-lower-rates
That’s too funny Mike. Who in the name of Jehova saw that coming. LOLOLOL!!!
It has already given back half the gain though and in the process created a nice reversal candle on the hourly chart. Bigger picture on a daily chart we can barely even detect that pipsqueak move so the charts are still intact suggesting an oil decline is imminent.
Sorry to say, but CAD is heading down and its going down hard this year.
Alex my friend question.
Do you see a top in gold 1275?
Cheers!
Hi, David 🙂
I personally think gold still has to run before rolling over to its YCL.
Testament to that is its great endurance to dollar’s strength: the initial reaction of gold to each renewed push up of the green power is to pull back, then gold ruminates that dollar action ending with discounting that dollar strength by regaining ground with a bonus up-tick.
PS: both gold and treasuries (all treasuries, regardless of maturity) have reverted to their 10dma today on light volumes. This action underscores their rise in new ICs.
Therefore, we have to endure these natural reactions (corrections) and keep our long positions.
WE ARE GONNA BE HIGHLY REWARDED SOON 🙂
Alex first off thanks!
So no YCL ala gold 1241 as Mr. Savage was once calling?
There are a “few” out there who have been calling for the dollar index to climb to 120. Maybe its time to listen to what they have to say.