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Will the dollar be the trigger


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#1 Stickan

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Posted 29 January 2007 - 07:51 AM

In my last post I suggested that something probably is up.
Something that will move the stockmarket.

We have an interesting situation with regard to gold and the dollar.

They both show an inverted Head & Shoulder pattern.

But they can't both be true. One has be a failure (unless the relationship between gold and the $ has changed...)

Gold is simple. Just an inverted H&S.
Support at the usual 65MA and we have had a small break with a small test of the neckline.

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Dollar index also shows the inverted H&S pattern.
However, we twice stopped at the 61.8% retracement level and note the arrow.
The second last top was exactly at the trendline crossing which is one of Constance Brown's ( http://www.aeroinvest.com/books.htm ) favorite trendline tricks: Look for a future trendline crossing and you may have a top/bottom comming up.
This is a good example.
Considering that we also are just below the falling major trendline suggests to me that it's the dollar that will fail.
My experience is that a H&S failure will bring price below the head (but let's hav a break first <_<


Any way, whatever happens, I think that the stockmarket reaction to which of these instruments that will fail (which I think we will see before a grand move in stocks), will tell us if stockprices will accelerate upwards or start a new downtrend.

And then we will follow that trend - right?

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#2 Tor

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Posted 29 January 2007 - 08:40 AM

And then there's Dow Theory Letters' veteran gold bug Richard Russell. On Friday, he wrote flatly: "The collapse of interest rates ended at the December low." He added helpfully: "The stock market does not like rising interest rates ...Yes, rising rates make the dollar more attractive. But rising rates in a debt-logged economy (think housing) will not be a benefit to the US economy ... From what I gather, there is massive amount of speculative money positioned for a decline in interest rates. If rates continue higher, the squeeze will be on, and a lot of people are going to be hurt. "How about this combination a stronger dollar, rising rates, rising inflation and increasing pressure on housing?"
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#3 Stickan

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Posted 29 January 2007 - 09:03 AM

"How about this combination a stronger dollar, rising rates, rising inflation and increasing pressure on housing?"


You may be right Tor,

I didn't notice the longterm chart of the dollar.
Bullish divergence in longterm oscillator and 3 tries to break the falling trendline.
Didn't Gann say that the fourth usuallt is a success?
We might be in for a "black hole" situation"?

Interesting.......

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#4 Russ

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Posted 29 January 2007 - 11:33 AM

-US dollar will form its final low in March 2008 +/- 1 Month. -Gold will peak in mid 2009. -Housing index HGX will bottom in 2009 just as gold is peaking. -Interest rates are ready to break out of their 25 year downtrend, which is going to kill the housing market. Looks like 1980 - 'Take II' - perhaps on steroids this time in comparison. Russ

Edited by Russ, 29 January 2007 - 11:38 AM.

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