US$ Top/Major or a Pause
Trader Scott’s Market Blog
December 5, 2016
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The “brand new” “Donald Trump US$ Bull Market” (which started in March 2008)is looking a little wobbly. As I’ve been repeating, the strong hands like to draw in lots of late comers (weak hands), by pushing a market thru the support and resistance areas, only to wash them right back out. So that’s why I was running the big chart of the $ with the resistance area marked and said this from November 16th:
I’m still very bullish on the US$, but that boat is getting a bit overloaded (of course after a big rally). And currently the $ is at a large resistance area. I do believe we push thru this area (100.5 on the US$ Index). But I’m aware there could be a large counter-trend move forming in here, especially with a potential for a quick upthrust thru this 100.5 area (sort of similar to what gold did on election night).
So, we did see the upthrust thru the resistance area as shown on the updated weekly chart, thedaily chart and here on an intraday view. Then, as per usual, you can see the late comers were drawn in by all of the suddenly discovered reasons to be long the $. And the strong hands are already pushing some of the new bulls off of the USS Trump Cruise Ship headfirst into the frigid Atlantic waters. (Hopefully Captain Stubing threw them some life preservers.) You can see the push right back below 100.5. The strong hands accomplished this by “letting” the market (weak hands) upthrust thru 100.5 on the index. And then they could sell and also sell short to their new customers, courtesy of the ridiculousness surrounding the “new” Trump $ Bull. The new demand on the “breakout”, as can better be seen on the intraday chart, was necessary to accomplish the strong hands’ goal. And you can also see the new little support area which formed at 100.64.
But I do believe this is just a pause in the big $ bull market. There are many who will believe this is the top in the US$, but my plan is to add on if the selling gets intense enough. This could be a precursor to some loss of faith in the “brand new” “Donald Trump US Stock Bull Market” (which started on March 9, 2009).
About
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day.Scott returned to markets over fifteen years ago where he continues as an independent trader.
'Trader Scott’s Market Blog – US$ Top/Major or a Pause – December 5, 2016' have 6 comments
December 6, 2016 @ 5:01 am Frank
I notice the extreme correlation between USD/YEN and Gold, while the USDIndex seems to loose steam(100.09), Yen seems to continue to drop (now again at 114.07) any thoughts on this? your view on the Yen? Thank you very much, Frank
December 6, 2016 @ 5:09 pm traderscott
Yes Frank, on a bigger picture basis, there certainly is a correlation. And I’ll continue this as an addendum in a bit.
December 6, 2016 @ 5:50 am Aamer
Hi Scott,
A quick non chart related issue re USD. I agree that technically speaking etc and even fundamentally we should see a stronger dollar if economies start deleveraging and debt gets paid back. But we now have a President that loves debt…..and claims to renegotiate debt deals and prides in bankruptcy to get a better deal. In that context I can see Trump verbally / twitterly pushing the USD down…..making ‘everything better/ higher’ before people finally realising they have been had by The Man, their own greed and stupidity…..so ST can see a stronger USD but not sure how it helps anyone especially Trump agenda and also why buy paper when inflation is your new friend – just see what is happening in India and it’s only the beginning. The only reason why the USD can rise in this context is that global money flows are coming in from more messed up places around the world….mostly man made messes by the way ie Wars or Keynesian policies via GS bankers and Central bankers ( also GS ).
Hope my question is not too confusing ….because that how it sounds to me !!
Thanks,
Aamer
December 6, 2016 @ 1:28 pm traderscott
Certainly Aamer all markets move based on liquidity, as you point out global money flows. The people for years who have told me I’m clueless about the US$ keep telling me about QE, etc. that’s just the US. What about the world? The US$ upside pressures will continue, for as you said the $ is a disgrace, but everyone else is even worse. Two years ago, I said to start watching gold vs. all other currencies. It’s now about waiting for the beginning of the topping process in USD, which is still to come. I’m writing a piece right now Aamer about my vote for Donald Trump, but how he is not remotely Ron Paul. Trump fits in beautifully with the major secular changes occurring now in many markets.
December 7, 2016 @ 8:54 am aamer zahid
Thanks. Look forward to it.
Trump is a Hillary male version !!! Same people financed him to power as the ones who put in Obama…G W bush…..etc Never understood why people don’t see this.
It makes me smile when I see people in the US claim to be a capitalistic society…with a Fed …subsidies to almost each and every industry incl Sports. There are laws governing everything you do from what you can drink , when you can drink and where you can drink…..At least socialist europe has 4 to 5 weeks vacation and better health care…
apologies for my rant…..
December 8, 2016 @ 12:44 pm traderscott
A Hillary male version – the female Hillary version is tough enough to deal with. But, I can’t argue with anything you said Aamer. you know, I voted for him “male” Hillary as you say, but he reminds me more of an FDR type. He certainly is not a libertarian.