We are now seeing US dollar strength wane, and in some cases, reverse. Individual pair analysis now becomes more important than simply saying “the dollar will strengthen.” The dollar seems likely to weaken further versus NZD and AUD, so as we pointed out a few weeks ago, the “China slowing” meme is being reversed (see AUDUSD … US Dollar Rally Fractures
The US dollar has strengthened, pushing into new highs for the move, new lows for EURUSD. Friday’s reversal action shouldn’t be ignored though, since we’re looking for the largest countertrend rally to develop since the summer’s rally in USD began. Recall a couple of weeks ago, when we highlighted the “USD rally just beginning argument.” In … Dollar Reaches Targets, Reverses
A market analyst is a bit like a detective. In order for a homicide detective to make an arrest, he needs a body, a murder weapon, motive, physical and testimonial evidence. Just like a detective, making market forecasts is all about building a solid case based on multiple types of evidence. Trader Skillset uses Elliott wave analysis as our primary … Sherlock Holmes the Great Trader
Our post FOMC update mid-week shined a light on our thinking, and not much has changed. Look for strength in the USD to complete impulse waves over the next couple of weeks in some of our major pairs. Sentiment should reach extremes, as is the case AFTER extended moves have already been seen. Don’t fall … USD Strength Part of a Terminal Set Up?
Today’s expected announcement, that the Federal Reserve thinks the US economy is in good enough shape to allow Quantitative Easing (QE) to come to an end, has many calling for extended USD gains. And, while we do indeed expect some near term gains, we think many newfound US dollar bulls are likely to be disappointed … FOMC Ends QE3, and That’s Bearish for USD?
Recall a couple of weeks ago when a mainstream business news reporter and a “famous” newsletter writer proclaimed, “The beginning of the USD bull market.” We mentioned at the time that it was ironic that someone could state that a bull market was “beginning,” considering the USD had been up for 12 weeks in a row (The “beginning” … Dollar Strength Will Complete Impulse
Clearly corrective action has developed in both USDCHF and last week’s favorite USDCAD. Other pairs suggest dollar strength ahead too, but some of that may be “terminal action.” USDCHF and USDCAD remain our favorite major pairs; could the Swiss National Bank (SNB’s foolish EUR/CHF floor) and oil price weakness (leading to USDCAD strength) come into traders’ focus coming up? USDCHF … USDCHF at Support, SNB Foolishness Ahead?
Last week we pointed out that sentiment, and our counts, suggested a pause in the 12-week-in-a-row dollar rally. Specifically, we wrote, “there might be some further follow through to the upside early next week, but I’d bet against the US Dollar Index closing out the week with another gain.” That’s not to say we’re now dollar … US Dollar Breaks 12-Week Rally
The Wolf met with a very well respected team of London-based emerging market debt/currency managers in New York on Thursday who confirmed our suspicions about trouble ahead for emerging market currencies. At Trader Skillset, we use technical analysis above all else to determine Context, but sometimes understanding fundamentals can clarify and strengthen a previously held opinion*. According to The … Currency or Debt Crisis in Turkey
“The bond bubble is going to pop. But the bond bubble I’m talking about is in junk bonds, not Treasury bonds.” -The Wolf Today brought an absolute shocker to the mainstream news media. GT Advanced Technologies, a component supplier to Apple (and junk bond issuer), filed for bankruptcy protection. On Friday, the stock closed with … The Bond Bubble is in Junk Bonds, Not Treasuries
Over the summer, it’s been a nice run for the US Dollar. Last week, I noticed two mainstream commentators in particular calling for further dollar strength – one was a Bubblevision reporter, saying, “It’s not too late” to buy dollars (King Dollar Rules) , and the other a popular newsletter writer saying the USD was at … Is the US Dollar Rally, Just “Beginning?”
Today we’ll take a closer look at our Elliott wave count for light sweet crude. Again, we do this to provide the Context of what a market “might do” or is likely to do. But, once we’ve gained some perspective, and formed an opinion, it’s time to do an analysis of Momentum, in Trader Skillset’s … Oil Due to Bounce, Should Be Corrective
FOCUS CHART OF THE WEEK: USDCAD Last week we wrote, “A pullback would be welcomed now, since the larger corrective pattern, wave 4, is complete, and new highs above 1.1300 should be seen.” A pullback is what we saw this week, and with Friday’s upside reversal, it’s possible that we’re about to push higher in … CAD in Trouble – The Wolf’s Prey Currency Review
In the weekend edition of the Wolf’s Prey we detailed the longer term Context for the major currency pairs. This time, in the special interim edition we’re going to go through our weekly charts for some of the euro crosses, yen crosses and exotics; EURJPY, GBPJPY, AUDJPY, EURGBP, EURAUD, USDNOK, USDMXN, USDZAR, USDTRY is in discussion.
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Last week we covered Trader Skillset’s longer term views in the majors, which are basically unchanged this week. Now we’ll begin to drill down to the daily charts where we can identify more swing trading opportunities. EUR/USD Prices found support this week, arguably at the wave (iii) bottom. It’s entirely possible that the current bounce is … Major Forex Pairs’ Daily Context
We’ve talked about the bigger picture yen count before. Mainly that a major bull market in yen (bear market in USDJPY) was completed at the 2011 low. Now, I think that the new bull market is headed to the 125-150, and beyond. A portfolio manager friend of mine has a target of “infinity” for yen … Yen Weakens Again, More to Come
The AUD/USD, and Aussie dollar generally, has been one of the weaker currencies in the world since its 2011 top. But, it seems that is about to change, so let’s take a closer look at the action over the past couple of years. First, a five wave rally was completed into the July 2011 top, … Aussie Dollar: Larger Correction Complete
The homebuilders (XHB) are always an interesting group to examine, because it tends to be an “early cycle” group. It’s a stock group that leads the market most likely because it touches so many different areas of the economy (commodities, interest rates, employment, etc.). As evidence of its leading nature, take a look at a stock … Homebuilders ETF Forms a Head & Shoulders
In Part 1 of Stock Market Risk – The New Reality, we covered the difficulty of investing in today’s environment, and the folly of forecasting. Rather than focusing particularly on forecasting, learn and create a process for identifying “stand alone” opportunities the Trader Skillset way. And, with that, enjoy Part 2: Here are two forecasts … Stock Market Risk – The New Reality Part 2
Investors are expecting far too much return from their investments, and far too little downside potential, as of today. These expectations rest on two faulty ideas: Expecting the next five years to mirror the past five. Belief in the power of the Federal Reserve, and central banks everywhere, to ensure economic growth. But, the Fed’s … Stock Market Risk – The New Reality Part 1
Gold has been in a sideways pattern since its mid-2013 low. First, let’s cover the near term action on the daily chart (below). A secondary bottom formed in late December 2013, from which a rally ensued and topped in late March 2014 in C or 1. From there, we see a corrective decline with a … Gold Weakness Should be Bought
The weekly USDJPY chart shows clear five waves up on the weekly chart with a triangle in the wave (4) position. So, at least a correction of that entire rally is due. The idea, based on this context, is to catch a good chunk of the wave (C) move to a roughly 38.2% retracement level of … USDJPY Correction May Continue