3 replies to this topic

[Russ]

from: http://yelnick.typepad.com/yelnick/

Saturday, April 28, 2007

Bet Your Bottoming Dollar - Sharp Reversal Ahead
It has been quite a run for the past month, but it should reverse sharply this week, probably coinciding with the change in months. The STU points out that until this month, the Dow has NEVER gone up 19 of 21 days, not since the Dow was first counted back in 1896. Their analysis points to a reversal, in one of three scenarios:

the Big One down (least likely),
a small reversal reflecting a minor 4th wave within a larger 5th wave (most likely), and
a large downtick, the end of subwave B, as part of a protracted wave 4 correction that could last the rest of the year (consistent with the Yelnick View).
We should look beyond the Dow to the Dollar. I am currently overseas and feeling the pain of Dollar weakness. The Euro has hit a record high against the Dollar. On the Dollar Index the once might buck is down to levels it has bounced off previously. It should reverse next week; if not, we could watch a Dollar meltdown. Neely as well sees it time to short the Euro, expecting a Dollar reversal. The Fed is now in a trap that has built for several years: either support the Dollar and drive the economy into recession, or let it fall and suffer more complex longer term turmoil. So far they are signaling that they will let it fall. Expect a behind-the-scenes attempt to reverse it next week. My bet is the Dollar debacle will be postponed until after the 2008 election, when the new President will take the long-delayed medicine.

Saturday, April 28, 2007 in financial waves | Permalink | Comments (10) | TrackBack (0)

[da_cheif]

records are gonna fall like pregnant flamingos.....snort

[S.I.M.O.N.]

l The Fed is now in a trap that has

anyone who seriously believes that the "fed is in a trap" should be committed to an insane asylum..

[Cirrus]

The Fed isn't in a trap---they just have to choose between higher commodity prices and much higher commodity prices over the coming 24 months.