Archive for May, 2011

THE USD RALLY

31 May 2011 - 9:22 pm UTC

Expecting a USD rally in 2011 like myself ? – Join the list.

Thanks to blog readers for their suggestions of analysts / traders
who are also USD bullish. (some being subject to confirmation)

FURTHER SUGGESTIONS OR CORRECTIONS APPRECIATED.

Robert Prechter
HS Dent
Bob Hoye
Danielle Park
Tim Wood
Mike Shedlock
Charles Hugh Smith
John Taylor – FX Concepts
Jack Crooks – Black Swan Trading
Chris Kimble ? – Kimble Charting
twitter.com/Fibarchie
globalmarketstrade.com
Felix Zulauf
readtheticker.com
stocktwits.com/UseA_Fork
Gary Shilling
twitter.com/cginthehouse
David Rosenberg

Tues May 31

31 May 2011 - 2:24 am UTC

GBPUSD good down leg has started.

CURRENT TREND = DOW-SP500 bearish as daily charts exert their
influence once again. 14:50 GMT

CURRENT TREND = USDX neutral / EURUSD neutral / AUDUSD bearish
DOW-SP500 neutral 14:33 GMT

GBPUSD short 1.6486

Trend = USD neutral / EURUSD neutral

CADJPY short 84.081 [close 83.803]

Trend direction = USD bearish / EURUSD bullish.

We got the DOW/SP500 bounce after all …

USDJPY long 81.184 [close 81.635]

CADJPY short 83.421 [close 83.332]

USDJPY choppy basing on daily chart continues.

These recurring short covering rallies result in additional overextension
and market distortion. This is why an eventual crash is guaranteed.
Similar market distortion occurred during 2007 / 2008 leading up to
the past crash.

DOW/SP500 buying support / USD selling returns once again…
Trend = neutral USD / EURUSD

GBPUSD short 1.6484 [closed 1.6499]
NZDUSD short 0.8174 [ closed 0.8195]

A reader reminded me to post a SHANGHAI COMPOSITE chart which i’ll
do. It has been tracking sideways since mid 2009. Weekly and monthly
are both bearish to neutral and further downside is expected once
DOW/SP500 correction resumes.

Mon May 30

30 May 2011 - 9:58 am UTC

Trend = moderate to strong USD bullish / EURUSD bearish.

Previously suggested short term upside for stocks – now looks
unlikely. What I am sure of is that resumption of equity correction is
very close and bearish DOW/SP500 daily chart exerts more influence
over mildly bullish intra day signals detected last week. Daily signals
indicate directional move down is imminent. Futs last 12,424

NZDUSD short 0.8174

GBPCAD short 1.6065 [closed 1.6084]

Trend direction currently moderate USD bullish / EURUSD bearish.

Ongoing trend direction vacillation continues and now reverts to mild
USD bullish / EURUSD bearish.

GBPUSD short 1.6484

USDCAD short 0.9766 [close 0.9770]
NZDAUD short 0.7635 [close 0.7657]

Sun May 29

29 May 2011 - 2:41 pm UTC

Additional USD selling pressure late last week should continue into this
week thus more short term upside for stocks, EURUSD etc. However
key index daily charts are now extremely overextended …

Suggested scenario: when EURUSD rolls over – dollar will rally and
stocks/commodities will fall hard. Or will stocks fall first ?
Or a combination of both ?

Due to high correlation with DOW/SP500 and USD — GOLD / SILVER
/ COPPER have not corrected much yet, but more downside expected
once equity correction resumes.

Markets are now extremely unstable. When the reversal occurs, the
reaction will be immense – a waterfall crash from the megaphone top
looks guaranteed to me.

I think that’s called ‘sticking your neck out’.

Sat May 28

28 May 2011 - 1:51 pm UTC

DOW weekly chart showing rising wedge enclosed within massive
megaphone top – warning of another Black Swan that came out
of nowhere and nobody could have foretold . . .

Fri May 27

27 May 2011 - 10:36 am UTC

More USD selling pressure detected..

USDCAD short 0.9766

NZDAUD short 0.7635

XAUAUD long 1434.13 [close 1434.06]

The potential short term equity rally once again looking uncertain.
When DOW/SP500 downtrend does resume – market consensus
should be clearer. Futs last 12,401

USDJPY long 81.034 [81.100]

Equity selling pressure has now strengthened – this unstable market
is getting close to it’s overdue correction. Futs last 12,396

USDJPY long 81.035 [close 81.005]

GBPUSD short 1.6417 [1.6431]

More USD selling pressure detected which of course is bullish for
stocks, AUDUSD, EURUSD etc. When this recurring USD selling
does cease – the market reaction will be immense.

XAUUSD, XAGUSD, EURUSD daily resumes choppy sideways action
– tracking recurring SP500/DOW buy support and USD sell pressure.
The equity rally possibility mentioned earlier and then cancelled has
now returned. So (short covering imo) equity rally is likely.This does
not change overall bearish outlook. Futs last price 12,426

USDJPY short 81.421 [close 81.015]
XAUAUD short 1452.35 [close 1428.70]

Thurs May 26

26 May 2011 - 10:18 am UTC

The USD rally gets closer …

Key equity index charts are increasingly bearish and unfortunately
a major sell off is guaranteed. I get no joy from being so bearish but
that’s what the indicators say.

USDJPY short 81.421

USDCAD daily chart is now bullish and further upside is expected.

XAGAUD short 36.341

AUDUSD short 1.0582 [closed 1.0587]

Needless to say bullish intra day DOW / SP500 signal again
overpowered by increasingly bearish DOW / SP500 daily chart so
no rally. Last futs 12,384

GOLD and SILVER signal remains clear.

DOW / SP500 / FTSE / USD signals are too conflicted atm so will stay
with SILVER / GOLD shorts. Need to wait for stocks to roll over which
should then result in clearer signals.

XAGUSD and XAUUSD now give a sell warning – last $1,526

XAGAUD short 36.121 [close 35.090]

All these conflicting signals is more evidence of market dislocation and
an indication that other markets want to correct but are being delayed
by stocks in my opinion.

USDJPY long 81.848 (charts give varied mixed signals) [closed 81.964]

Yep, another (short covering) equity rally may be ahead.
DOW futures last 12,393

————————————————————————————
In response to reader requests for Treasury Bond analysis :

10 Year U.S. Treasury Futures
Daily – bearish/neutral
Weekly – neutral
Monthly – bullish/neutral

30 Year U.S. Treasury Futures
Daily – bearish/neutral
Weekly – neutral
Monthly – bullish/neutral
————————————————————————————

USDJPY short 81.78 [close 81.84]

GBPUSD short 1.6311 [close 1.6308]

That recurring USD sell pressure and DOW/SP500 buying support
returns once again so the inevitable sell off may be delayed a bit
longer.

XAUAUD short 1452.35

XAUUSD short 1527.61 [close 1527.84]

Wed May 25

25 May 2011 - 7:49 am UTC

The Next Black Swan Lies Ahead – Longs Please Be Careful.

It took longer than expected to form another top – however the next
GOLD and SILVER sell off looks close now.

USDJPY short 81.98 [close 81.99]

XAUUSD short 1527.61

GBPAUD short 1.5451 [close 1.5450]

XAUAUD short 1452.35

AUDUSD long 1.0508 [close 1.0507]

EURUSD short 1.4031 [close 1.4042]

XAUAUD short 1454.87 [close 1454.72]

XAUUSD short 1527.12 [close 1527.99]

GBPUSD short 1.6231 [close 1.6246]

Daily charts of key stock indexes continue to break down.
EURUSD weakness continues and opposite for DXY (USD index)

EURJPY short 115.578 [close 115.214 ]

EURUSD short 1.4095 [closed 1.4092]

XAUUSD short 1525.31 [close 1526.51]

AUDJPY short 86.741 [close 86.607]

Tues May 24

24 May 2011 - 10:21 am UTC

My indicators now warn that a sudden major DXY (up) and EURUSD
AUDUSD etc (down) move is brewing.

XAUUSD short 1525.31

XAUUSD short 1525.07 [close 1525.98]

XAUUSD short 1523.76 [close 1524.94]

AUDJPY short 86.741

AUDJPY long 86.613 [close 86.852]

XAUUSD short 1519.75 [close 1520.73]

XAGAUD short 33.859 [close 33.935]

USDCAD long 0.9776 [close 0.9774]

AUDUSD long 1.0554 [ close 1.0555]

XAGAUD long 33.459 [close 33.921]

XAGAUD / XAGUSD 8 hour chart has gone bullish.

EURUSD long 1.4070 [close 1.4064]

USDCAD short 0.9765 [close 0.9771]

USDCHF long 0.8854 [close 0.8850]

Mon May 23

23 May 2011 - 11:13 am UTC

AUDUSD long 1.0526 [close 1.0520]

NZDUSD long 0.7880 [close 0.7915]

USDCAD long 0.9786 [close 0.9787]

AUDUSD long 1.0521 [close 1.0517]

EURUSD long 1.4021 [close 1.4026]

USDCAD long 0.9789 [close 0.9784]

EURGBP long 0.8697 [close 0.8690]

NZDUSD long 0.7899 [close 0.7897]

USDCAD basing on daily chart continues.

As mentioned, I wish it was early 2003 as my indicators would have
been very bullish but unfortunately it’s the exact opposite. Naive
investors who are long without protection will get burnt again like
2007 – 2008 but probably worse this time. And that makes me sad.

Daily charts of key global indexes continue to break down.
EURUSD weakness continues and opposite for DXY (USD index)

May 19:
As mentioned, important currencies, crude, copper, gold/silver have
already indicated their intended direction and we are waiting for
equities to catch up. Maybe DOW/SP500 is waiting for a trigger, but
it’s getting close.

May 8:
AUDUSD megaphone top warns of significant equity and commodity
downisde. Chart posted April 27 and May 4. Despite the intervention and
protracted distribution, the top is in for many markets according to my
analysis.

USDCAD long 0.9704 [close 0.9777]