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No surprise, Barrack Obama handily one the US election, which means that with silly season
over, they voted the same rascals back into the White House instead of a
different batch of rascals. In the end, Mickey Mouse or the Pope could have
been stuck into power in the US, the fate of the currency was baked in the
cake a long time ago and we are simply following the cycle path. Today's
update will provide some clarity regarding the US Dollar Index, as the
developing pattern is somewhat recognizable (Refer to Figure 7).
As side note, I probably will not be
posting a US Dollar update on the web for sometime,
as the turning point is nearing....maybe after the future bottom is put in place,we will come out after the
fact. Future once per month releases onto the web will include S&P 500
Index, HUI, energy and XOI, Gold and related ratios etc.
Currencies
The daily chart of the Canadian Dollar Index is shown below, with lower
Bollinger bands in close proximity to each other beneath the current price,
suggestive that a bottom was put in place. Upper Bollinger bands are still
above the current price and require another 2-3 weeks before a clear
indication of an uptrend in the Loonie commences.
Full stochastics 1, 2 and 3 are shown below in
order of descent, with the %K beneath the %D in all three instances.
Extrapolation of the %K trend in stochastics 1 and
2 suggest at least 2-3 weeks before crossing above the %D to indicate a
change in trend. Upside in the Loonie over the next
6-8 months is any where from $1.11-1.13, down 3
cents from our initial target. So far, the expected pattern of the CFS is
playing out. The inverse head and shoulders pattern that potentially is
forming has a short-term upside target of $1.05
Figure 1
The daily chart of the Australian Dollar
Index is shown below, with all three lower Bollinger bands beneath the index,
suggestive that a bottom was put in place. Full stochastics
1, 2 and 3 are shown below in order of descent, with the %K above the %D in 1
and 2 and beneath the %D in 3. With the %K in stochastic 3 curling up, it
suggests that a multi-month uptrend is about to commence.
Figure 2
The daily chart of the Euro Index is
shown below, with lower 21 and 34 MA Bollinger bands in close proximity to
each other beneath the current price, suggestive that further downside is
looming. Full stochastics 1, 2 and 3 are shown
below in order of descent, with the %K beneath the %D in all three instances.
Extrapolation of the %K trend in stochastic 2 suggests another 2-3 weeks
before a bottom is put in place. An inverted head and shoulders pattern
appears to be forming, with an upside target of $1.30. Going forward 6-8
months out, expect the Euro to rise to $1.46 – 1.48.
Figure 3
US Dollar Index
The daily chart of the US Dollar Index
is shown below, with upper 21 and 34 MA Bollinger bands in close proximity to
the current price, suggestive that further upside is looming. Full stochastics 1, 2 and 3 are shown below in order of
descent, with the %K above the %D in all three instances. Extrapolation of
the %K trend in stochastic 2 suggests that another 2-3 weeks of time is
required before a top is put in place.
Figure 4
The weekly chart of the US Dollar Index
is shown below, with all three upper Bollinger bands in close proximity to
each other, suggestive that a mid-term top was put in place earlier this
summer. Full stochastics 1, 2 and 3 are shown below
in order of descent, with the %K beneath the %D in all three instances.
Extrapolation of the %K trend in stochastics 2 and
3 suggest that a bottom may not be put in place for at least another 8-10
months (looking for late July 2013). One important thing to note is that a
bottom in the US Dollar will coincide with tops in commodities, broad stock
markets and other currencies.
Figure 5
The monthly chart of the US Dollar Index
is shown below, with lower 21 and 34 MA Bollinger bands in close proximity to
each other, suggestive that a 1996 style uptrend or
late 2006 downtrend is approaching...I am leaning towards the 2006 style of
decline based upon positioning of stochastic on the weekly chart. Full stochastics 1, 2 and 3 are shown below in order of
descent, with the %K above the %D in 1 and 2 and beneath the %D in 3. The
monthly chart does not really provide any indication of weakness just yet,
but the %K in stochastic 1 is approaching critical resistance. At some point
within the next 30 days, a top will have been put in the US Dollar.
Figure 6
The short-term Elliott Wave count of the
US Dollar Index is shown below, with the thought pattern forming denoted in
green. I was looking for a diametric triangle, but recent timing of the
uptrend invalidated this thought. As it stands, a flat (3-3-5) is thought to
be forming at present, with wave [c] beyond the 100% equivalency level of
wave [a] it appears that an elongated flat pattern is forming, with the
1.618x level at 81.48, just below the expected high the US Dollar can reach
based upon the pattern forming. On very important observation Glenn Neely
made with his NeoWave is that elongated triangles
will often form either one leg or a segment of the first wave of a triangle.
As per Figure 8, this ties in well with the hypothesis that an expanding
triangle is likely to form between now and 2020. At present, waves [a] and
[b] are nearly equivalent in time, which suggests wave [c] at present will be
equal to [a] + [b]. Based upon this, a top is not expected for at least 2
weeks, with the potential to extend out to 3 weeks. Once complete, expect wave
C.(A) down to start, with at least 2-3 months of
downside, followed by 2-3 months of sideways to upward price action, with one
final down leg to the 70-72 area no later than the end of July 2013.Based
upon this chart, the US Dollar is likely to remain in wave [c] until the end
of this month before topping out and declining in wave C.(A).
Figure 7
The long-term Elliott Wave count of the
US Dollar Index is shown below, with the thought pattern forming denoted in
green. Wave [A] is described as having an (A)-(B)-(C) structure, but this may
require modification to (W)-(X)-(Y). Or...wave A is actually wave (A), wave B
is actually wave (B) and wave C becomes wave (C). Time considerations fit
with the latter, so future updates with a modified Primary Degree (Purple)
may be seen. A bottom in the current downward trend is not expected to base
until late July 2013, which will be followed by a very sharp upward move in
the US Dollar to anywhere from 88-90 from late July 2013 until late in 2014.
This period of time is going to be extremely difficult for everyone globally,
as the short, but intense period of deflation will hit pension funds, putting
many into non-existence. More and more people rely on the government, which
is why more and more people have their hand out for government programs. This
all costs money and in the end, the safety nets of society will be cut and
then family will become very important. I can not
stress how important owning gold and silver bullion is going forward, as it will literally help people live and even
retire. Balance ownership of gold and silver bullion with precious metal
shares. PM stocks are so dirt cheap right now that we probably have seen lows
for the next 20 years (Refer to stock picks from a few weeks ago on the site
archive). Levels at present are cheaper that 2008 on a relative basis to the
price of gold, so carefully pick stocks that pay dividends, along with up and
coming producers. Five to 8 years from now, PM stocks will be much higher
than present levels.
Figure 8
That is all for today...back tomorrow
with an update of gold and related ratios. Have a great day. At the request
of a few micro mining companies we are trying to structure and assimilate
legal forms, swing move dates, projections etc. for aiding in timing future
financing to minimize shareholder dilution, so more information on this
hopefully will be available in the future.
David Petch
Treasure
Chests.com
Treasure Chests
is a market timing service specializing in value-based position trading in
the precious metals and equity markets with an orientation geared to
identifying intermediate-term swing trading opportunities. Specific
opportunities are identified utilizing a combination of fundamental,
technical, and inter-market analysis. This style of investing has proven very
successful for wealthy and sophisticated investors, as it reduces risk and
enhances returns when the methodology is applied effectively. Those
interested in discovering more about how the strategies described above can
enhance your wealth should visit our web site at Treasure Chests
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