A Secular look at USD and USB
Stock-Markets / Financial Markets 2015 Apr 16, 2015 - 02:21 PM GMT
A look at the monthly chart of USD reveals the backdrop for my analysis and conclusions.
First, the rally may be seen as a Cycle degree Wave II.
Second, the 50% Fibonacci retracement value of Cycle Wave I happens to be 100.87. Note how close the high came to this.
Third, in a Triangle retracement, Wave [C] is often equal to the longest leg of the Triangle, in this case Intermediate Wave (A), which is exactly 21 points. Add that product to the lowest point of Wave (E) at 78.93 and the result is a target of 99.93. This is a spin-off of the function that [Wave (C) often seeks the same measure as Wave (A)].
Friends, the only conclusion that I can reach is that the USD is about to begin Cycle Wave III, which may very soon become unmistakably evident. Remember the Dollar longs are one of the most crowded trades, possibly with leverage (Yen Carry). Those longs may be forced to unwind all the way down to the Wave [B] low at 78.93.
It appears that on April 1, USB may have ended its long secular uptrend exactly 33.54 years from its start on or near October 1, 1981. This is .86 years short of an exact 34.4 year duration which is expected on or near February 24, 2016. That date may be a Wave II high after USB breaks its long-term trendline, currently near 133.00.
SPX Premarket appears to have broken the Orthodox broadening Top trendline, near 2103.00 this morning, giving it a potential gap down at the open.
Initial Jobless Claims jumped by 12,000 this week as prior claims are revised upward.
Meanwhile, Goldman Sachs posted a profit at a 5-year high this quarter.
Regards,
Tony
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