Dollar Rally

Wasn’t the dollar supposed to crash … go to zero … implode?

This is the flip side of the hyperinflation narrative.

Dollar implosion like hyperinflation, not happening.

Way back in 1921, Livermore said to Wyckoff that his assessment of the markets was, ‘it’s all about deception’.

Nothing has changed.

It’s in the best interests of those controlling the narrative to have as many as possible (always) on the wrong side of the trade.

We haven’t posted this link in a while … the video keeps getting deleted but re-appears every so often. This is how it really works … Period.

Note the date stamp on the comments. The video’s at least 13-years old and it’s still relevant today.

So, the dollar’s in a rally.

Not only that, momentum indicators, MACD, on the monthly, weekly, daily, all point higher. It’s in a rally and a sustainable one.

It’s completely opposite the accepted narrative.

You can feel the tensions building.

Bonds could be reversing but have already pushed rates high enough (long enough) to choke-off critical sectors of the economy like here and here.

Now we see the dollar has bottomed as well.

It looks like a strong multi-month (or year?) rally. Correspondingly, gold is weak. The overall markets are stretched to ever-livin’ extremes; never before seen.

Whenever this baby pops, try logging on to chaos, or exit any position (except maybe for the long bond).

Our approach then (not advice, not a recommendation), is continue work on positioning short. So far, the ‘project’ is taking small hits in those attempts. We’ll see how basic materials (SMN) works out today.

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Throw-Over, Or Not?

IYR’s in a terminating wedge … will it throw-over, or reverse from here?

American Tower (AMT), the largest cap in the ETF, bounced off a 23.6% projection during last Friday’s session.

That keeps a short term bullish possibility alive. Longer term, AMT still remains in a downward trading channel.

Bonds and the dollar continue at extremes. On the dollar side, it looks like a significant bottom is in the works.

Weekly UUP, MACD has posted a bullish divergence along with an MACD lines cross (to the upside) signal.

Bonds (TLT) remains at its near term lows; near support levels formed back in September, 2019.

IYR is right at the upper wedge boundary and volume (upside pressure) has dropped significantly.

It could still levitate higher … however, it seems that getting a significant ‘throw-over’ is going to require more energy than is currently available.

We’ll see what price action has in store for Tuesday’s session.

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Bear Flag … Bear Market

Bear flags post in a bear market

Bull flags post in a bull market

Right?

One would think.

It’s different though, if you’re a rabid ‘not-right-in-the-head’ gold bull.

The professional does not care which direction the market is heading. The only important thing is, and to paraphrase Livermore:

‘There’s only one side of the market to be on … and that’s the right side.’

GDX has posted and tested a bear flag.

At this juncture, it’s heading lower … possibly to test between 15 – 17, as was just mentioned yesterday, by Van Metre (time stamp 10:00).

Conversely, in the general equity markets, there’s reversal action with the S&P, Dow, Russell, all lower.

On top of that, bonds are in their own reversal (up again in the pre-market) as well as the dollar.

In the Van Metre link above, in addition to comments on gold, he also sates ‘the market is not prepared for a bond (and dollar) reversal.

When markets are sure of one thing and the other happens, it’s very ugly.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Dollar Channel Identified

There’s a possible trading channel in dollar index ETF, UUP.

The channel shown is a Fibonacci 21-days wide; added bonus is max bottom (1/6/21), posted a Fibonacci 13 days after ‘Day 1’.

These are market nuances that can be negated at any moment.

However, if the channel holds, it’s just one more indication we’re at a significant inflection point.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Removing The Risk: Oil & Gas

The dollar and bonds have reversed.

Yesterday, oil futures posted a downward reversal bar. This morning’s (pre-market) session is lower again by about 1.00%.

Longer term perspective (above), Oil & Gas Sector, XOP is at resistance.

Shorter term, the daily (below) posted a measured move off the wedge formation.

There’s not ever ‘no risk’ in the markets … but there is ‘low risk’.

That’s where we are now with XOP. Risk is low the up-trend will continue unabated.

To get past long-term resistance, (if it’s going to do so), XOP may have to come back and retrace for fuel.

With unemployment claims just out at 965,000 does anyone really think the economy’s going to bounce back?

Back in the day during a real (not contrived) recession, it was bad when unemployment claims hit around 385,000. Those were the days.

One of the Inverse funds for XOP that’s fairly liquid (not advice, not a recommendation) is DUG.

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Dollar Reversal

If the dollar (UUP) keeps going, its trend-line’s rising at a stiff 65%, annualized.

Sectors like Oil & Gas, which have essentially been a ‘dollar-short’ theme are at risk of significant reversal.

That’s in addition to anecdotal data from Van Metre’s updates, the oil patch is awash with inventory.

XOP is a good proxy for the long side and DUG for going short (not advice, not a recommendation).

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Good Short, Bad Short

Seems like Tesla (TSLA) is always in the news.

Now, we have ‘the big short’, as reported by The Money GPS, doubling down on a possible even bigger short.

Is TSLA a good short opportunity or just a high visibility gamble; or maybe at this point in our history, just another psy-op?

How many minions are flagellating themselves over TSLA, anyway?

From a trading standpoint, TLSA could reverse from here. It could also gap higher into a wedge throw-over. With the weekly MACD showing no signs of erosion, probabilities are about equal.

Bad Short

Now, let’s look at another chart:

Real estate, IYR is showing classic signs it’s about ready to roll over.

Its been struggling for months at the 85-86 area and just yesterday, posted a new weekly low.

Yesterday as well, bonds reversed to the upside. Pre-market activity points to a higher open … solidifying the reversal.

On top of that, the dollar shows a higher open having (downward) tested its up-trend at the last session.

The list can go on but we see the difference.

One is a gamble (or even a psy-op manipulation of followers) and the other is a trade with high probabilities.

Good Short

The table below has current positioning (not advice, not a recommendation):

Special Update: 9:52 a.m. EST. Price action in DRV pushed to stop level and has recovered quickly.

Position is being maintained (for now) with analysis to follow.

Update: 2:21 p.m. EST. IYR looks to be headed to a 38% retrace at approx 84.25, level. All DRV positions exited. Will look to re-enter shorts at higher level, price action depending.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Dollar Up, Market Down?

The dollar has been inversely correlated since March of last year.

A reversal was identified in this report which thus far, has proved correct.

Bonds are also showing higher in the pre-market, having met a measured move (wedge) target last week.

The UUP, weekly close has price action slowing its decline, stopping and then reversing. That’s where we are now.

Weekly MACD ticked up (slightly) last week and higher open this morning, would confirm the divergence.

Market sentiment readings as reported by J. Bravo (time stamp 1:00) are literally, off the charts.

On top of that, internet scuttlebutt over the weekend shows at this juncture, absolutely anything can happen.

Having a market stance (or position) that includes possibility of power outages, banks going off-line, internet disruptions and general overall chaos, would seem to be reasonable.

In line with that, entries were made in DRV last week as shown (not advice, not a recommendation):

Pre-market activity for IYR, points to a lower open, DRV higher.

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Gold Down. Why?

We have the usual suspects rolled out; providing expert analysis on why gold went down.

The answer is quite simple. It tested a trend break, then reversed.

If we look at the (close) chart of GLD, it broke an uptrend during the week of November 20th, last year; went lower and then back to test.

That test was rejected dramatically with Gold (GLD), heading significantly lower; getting whacked down over 5%, in just two days.

This is not bull market behavior.

Steven Van Metre’s assessment (at this juncture) that we’re in a deflation event is being shown correct. The lagging factor in the scenario is the overall market … still near all-time highs.

It’s true bonds broke lower (rates up) this week but that’s another event answered by technicals; the wedge formation, discussed here.

Both bonds and the dollar have set the stage for a swift reversal.

Just how that’ll affect an extended, obscenely overvalued, stretched, call options wild market with everybody all-in, is not known.

Getting back to Van Metre; he’s reported, during this past week, small traders/speculators added to short (bond) futures positions.

If there’s a signal bonds are stretched, ready to reverse, it’s the little-guy just now getting in (going short) …. right at the bottom; as usual.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Dollar Bears Trapped

Price action in Dollar Index (UUP), shows familiar signs of a trap.

Price action closed yesterday at the low … after a prior lower close.

This morning opened gap-higher and near yesterday’s highs.

Price action then went higher … setting the hook.

Anything can happen and the bears can find some extra muscle somewhere. One gets the sense though, we’re at a pivotal juncture.

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.