57 thoughts on “THE DOLLAR IS NEARING A FINAL YEARLY CYCLE LOW

  1. Steffmeister

    I’ve seen a chart from a very clever analyst predicting a dollar top a year from now, nothing spectacular, maybe a double top at 103-104 …

    1. Gary Post author

      I think the market started the bubble phase on election night. It usually takes about a year and a half to complete the parabolic run.

      You will know it’s time to get out when everyone in the restaurant around you is talking about how much money they are making in the stock market.

  2. TraderPete

    Bubba says the slide in silver and gold is over, especially silver. What Bubba says, Bubba gets. He is an analyst at the CME. Therefore, no dead cat or dead rat bounce. This rally is for real. 😻

  3. Gary Post author

    Well since every other ICL over the last 17 years has included at least one failed daily cycle, and we don’t have one yet, I’m going to go out on a limb and say this time won’t be different.

    Those are always dangerous words when it comes to investing. “It’s different this time”.

    It almost never is.

  4. primetime

    Nasdaq is now the longest trade on WS, just as the dollar was recently. Virtually everyone is long the Nasdaq, but that is OK. Rally on, piece of cake?

      1. Bigdaddy

        primenuts, pay attention before talking smart ass like. I am bearish on tech. I bought 500 SQQQ this morning. I was just wondering why Gary has never spent much time on the best performing sector (tech) of the last several years while wasting time on duds like gold and the miners.

    1. Gary Post author

      Amazingly enough sentiment in the QQQ is only at 64% as of last night. The intermediate score, a compilation indicator of longer intermediate sentiment, is at 63% bulls. There is still lots of skepticism regarding this rally. Too many people like Bigdaddy are still trying to pick the top.

      There will come a time when everyone believes that stocks can only go up and that money flows freely from the stock market money tree. I think it’s still at least 6-8 months in the future.

  5. BailOut-2-BailIn

    The USD index topped on 1/2/17 and the trend change has seen lower highs and lowers lows since. We should also keep in mind that 2017 ushered in a new US President who wants a cheaper $. I also see a megaphone topping pattern that started in Feb/Mar of 2015 on the weekly chart. This particular trend line break also goes all the way back to June 2014 where the index took off on a parabolic run. I think this break is significant and has further downside before we see this ICL. The momentum of this drop (4 down months in the last 5) might be signaling a stretch cycle. JMHO

  6. bluelagoon

    Speaking of semis – looks like SOXS is going to rally soon. I haven’t studied it but noticed it may be close to a local bottom in the coming weeks.

    1. ras

      soxs is in a strong downtrend. Technical indicators are not helpful in detecting a bounce. Last bounce was $1 plus and then back to down, down, ….

      1. bluelagoon

        Thx ras. I agree with you – very strong downtrend. My indicators are telling me though that in the next few weeks that SOXS and VIX will bounce….we are coming into that timing band where the mkts rally into the Memorial day long weekend and then sputter about a week afterward. Let’s see if this year is a repeat.

        1. ras

          Not sure about timing. One strategy could be to put money into stocks/etfs on the new highs list. Fading momo = exit. No point in wasting time on dud groups: energy/metals. Their day will come. But, it is not today.

  7. primetime

    Sorry BD,

    I agree with you on your point about Gary’s focus. I hope that sqqq trade starts to work out so you will be more happy. Relax a little, other people on this blog called you a contrarian indicator, not me.

    Oh, by the way, I prefer caveman or neanderthal over primenuts. Only my wife is allowed to call my nuts prime please.

    And also, I always assumed with a handle of BIGDADDY you would be trading a little more than 10 G’s daddy.

  8. Don

    Microsoft is on a tear today. up 1.7% I guess investors are not concerned that Windows 10 is proving to be another flop. It’s little more than an advertising platform that spys on your every keystroke. I was just reading that Windows 7 market share is actually rising as people switch back.

  9. Bigdaddy

    Sold the SQQQ at the close for 31.57. Damm! QQQ has been relentless. That’s five days in a row of losses and this ass rape is starting to hurt.

    1. Pedestrian

      My Nikkei indicator (you know the one. I have been blathering about it for months already) is holding steady below 20,000 for more than a week now and seems unable to crack through overhead resistance. I figure its got until Fridays options expire after which time it makes a decision and fall backs or busts through to the upside. So next Monday the 22nd is when it gets interesting for both stock markets and gold.
      http://finviz.com/futures_charts.ashx?t=NKD&p=h1

  10. Pedestrian

    Here is something odd to think about.

    There is an all-time record long position held by the Commercial Hedgers on the Canadian dollar right now. Its just happened in the past two weeks. If any of you have any good ideas as to why CAD is being bought so heavily you might want to throw that idea in the ring for consideration.

    I have a couple thoughts though. First, the Loonie often leads crude oil so it may be an indirect bet on higher oil prices. The problem with that idea is that if you examine the Commercials positions in the past years they almost always seem to be on the wrong side of the trade.

    In other words, if the Commercials are long CAD it means oil is going down (oops….sorry Gary!)

    The other thought I had was that its a bet on USD falling since America is the countries largest trading partner and there is so much cross-transactional trade. For example, if you had done a deal with a Canadian company but worried about currency exchange differences on the date of payment you might hedge in CAD if you expected your own currency to fall before payment was made.

    Of course the obvious reason Comm’s are long is because large traders are short and they always take the other side of the bet. Personally I see the Loonie falling in the bigger picture and taking oil down with it (fairly hard too if you look at the CAD chart). Shorter term there is a good support coming right up that should offer a relief rally and hope for the crude bulls in the crowd.

    Any other ideas out there?

    Have a look at the COT’s chart for yourself. It’s on the bottom panel.
    Just note how radically positioning has changed in the last month. It must mean SOMETHING.
    http://finviz.com/futures_charts.ashx?t=6C&p=w1

  11. Alexandru Popovici

    Ped, since you threw the towel on COT, also take a look at nat gas’s COT — it is more reliable and shows more bearishness than before the YCL in Feb2016.
    If to this you add the confirmed ICL in Feb2017, then we still have plenty of weeks for Natgas to do..what?! To find it’s YCL next month below 2.64
    Cheers, going to sleep.

  12. jskauai

    Gary, take a look how rambus draws his trend lines. https://rambus1.com/2017/05/16/uup-update-103/ If you were to use UUP for the dollar proxy how would your trend lines be drawn? I am curious because when I view a dollar chart my trend lines are closer to what you are showing. As per netdania.com, looking at a weekly chart, the dollar appears to be sitting on the bottom line of a rising wedge. The line starts at 9/14/14 low is touched multiple times from 7/16 to 9/16 now again today. Interesting to say the least!

  13. nautique99

    Gary, with all due respect, I think our eyes for any clue shouldn’t be on the US dollar index itself but rather the USDJ/JPY ,and Euro. I said last week GDX was bottoming due to an overbought USD/JPY and other reasons. Its now turning around. If this thing fall over, it will take the SM with it….and gold could soar pretty fast. Dont forget the Euro , until the French election, was too risky to offer any alternative to the USD. My feeling is that King dollar may not be so much of a king for a little while. We can make a list of reasons why money should flow out of the USD and rotate to other currencies and markets…

      1. Gary Post author

        This is what has to happen to set the stage for the next leg down. I warned everyone this would happen.

        I’ll say it again. Even if traders had a working crystal ball they would still find a way to lose money, because they wouldn’t trust the ball.

          1. Gary Post author

            and all the people that bought tech near the lows are making a killing, and everyone who bought nat gas or 3D printers or AMZN or AAPL or any number of different companies or sectors at random times during any given year.

            There are always opportunities brewing. My point is they never look like opportunities until the opportunity has already passed. I’ve been predicting for months that tech would run once it broke out. I predicted biotech would have a big move over a year ago. I’m telling you now energy is going to produce a big move in the coming months.

            When are you going to take action on one of these trades? Instead you are worried about missing a counter trend rally, dead cat bounce, during an intermediate decline?

    1. zbigkid

      Yep. Long way to go before sentiment in gold even becomes remotely bullish. MACD and RSI are positioned well too, for a much larger run higher. Dead cat bounce ? Sure. whatever.

      1. HomerJ

        The fact that markets are down overnight gives me a pretty good insight. Also they were struggling to move in any direction and the drop seemed like the likely outcome as it was easier: upside needed a good catalyst but with earnings mainly finished, there wasn’t much to go on.

  14. Don

    Gold is up and the S&P down in after hours trading but these things have a habit of reversing by the opening bell of the US stock exchanges. Will this time be any different?

    1. primetime

      Probably, because I heard Carl Icahn just left the inaugural ball to buy stocks and Stanley Druckenmiller sold all his gold because of inflation. I still cant get over that election night swing. Anyhow, just like it shows, it will go up when it is time and the rhetoric and narrative fits. Just hold tight and be patient. I don’t know if I would want to be completely out of PM right now.

  15. Pedestrian

    Well, I can tell you one thing and that is that the Nikkei is going to go lower. Having failed to break resistance at 20,000 on a second try it does look intent on a drop back now. My calculation is the fall could be all the way back to 18,100 or thereabouts and in the meantime expect gold to catch a nice bid as Yen/$ powers up with declining Japanese equities at its back.

    1. Steffmeister

      I hope you are wrong, Ped. I am 80% out of precious metals. Looking att NIKKEI there is a beautiful inverse head&shoulders pattern. However the last upmove is butt ugly with a lot of GAP’s.

      My fractal in GDXJ is predicting a high for miners late June, but other analysts, much more skilled than I are predicting a summer low.

      mmmm … I still think this is a dead rat bounce 🙂

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