Mario to the Rescue …

September 6, 2012

I have been saying that the dollar probably printed a daily cycle low last Friday.

Of course we need a swing low and trend line break for confirmation.

What happens if the dollar breaks below last Friday’s intraday low of 80.96 tomorrow instead?
A break below last Friday’s intraday low would force us to label tomorrow day 34, and counting.

A more likely scenario if the dollar breaks below last Friday’s low is that the dollar is on day 9 of a daily cycle the printed a low on 2/23.

This “what if” scenario is more in line with what I see developing with equities.

Thursday could be day 31 for the equity cycle.

A second interpretation that is congruent with the dollar being on day 9 is stocks being on day 2 of a new equity cycle

We have seen gold, silver and the Miners break out and today we see equities have a break out.

Should the dollar not go lower but break higher, then we will need to reconsider this second interpretation.

And equities breaking out into a new daily cycle is congruent with the Miners

The Miners tend to lead equities and this looks like what the Miners did this week.

On Monday, the Miners printed a swing low and trend line break confirming a new daily cycle.

I think that Ben can best sum up this weeks market action …

To infinity and beyond

6 responses to “Mario to the Rescue …”

R41

September 6, 2012

Thanks LM,

Curious too, any thoughts on the 20 Year, TLT. Looks like it’s dropping into a dcl, but with the DXY refusal to bottom, and what looks like may be continued stock strength, was wondering if we could see a failed dc and start the drop into a yearly low.

Also, looks to me like the DXY has a clean break of the upslope 3 year cycle trendline. Any thoughts there?

Thanks Chris

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Thursday Sept 6th – Here comes Mario! – Page 4

September 6, 2012

[…] 53 Mario to the Rescue … | Cycle Trading […]

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ALEX

September 6, 2012

Everything sure seems to line up better with the second dollar scenario…. I think that weakness in the dollar has BEN telling us something
,but for sure, Time will tell.

Thanks L.M. !

ALEX

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R41

September 6, 2012

Alex, I think Ben is trying to tell us he wants to keep his job and get Obama re-elected.

Chris

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trondtveten

September 6, 2012

Thanks for todays report, and for highlighting my commentary the other day.
The chart of the Sp500 just have had the striking look of a bullflag, for several days before this breakout. Perfectly linar pullback in a coiling low-volatility, declining volume, sort of wedge. In contrast, before downtrends, there usually is this ‘rolling over’ pattern + some choppiness.

One method for gauging the dollar prospects is to watch the gold vs Euro chart, XAU/EUR. If for instance this pattern looks more bullish that the Gold/USD chart, that usually indicates an impending dollar strength. In a way this is using gold as a ‘benchmark’ to evaluate the $/Euro relationship. (Logical for those who consider gold ‘the only real currency’..)
And likewise if both the euro-gold and dollar-gold charts have a patterns with upside targets, but the technical target of the Euro-gold chart is higher.
The Xau/Eur chart;
http://www.xe.com/currencycharts/?from=XAU&to=EUR&view=1Y
Looks quite dynamic, with the recent breakout of a strong reversal formation

Agree with Alex’s pointing out the resistance facing a silver uptrend. (Today’s reversal perhaps an example..). However, the drop last year was less than 50% while the trauma in 2008 was down to 1/3-rd + in a severe general crash setting. And why was the initial pop up this year considerably larger than in 2010 if people are now supposedly more prone to taking quicker profit?
But around 40-42$ the resistance will be massive. 2 possibilities, a long grind several months or a quick but severe drop. Similar to what happened when the SP500 in the spring 2010 reached up to the 1220 level from which the 2008 crash started. Everybody at once so happy to get out again at break even was probably an important factor contributing to that year’s ‘flash crash’.

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trondtveten

September 7, 2012

The $ just broke below. That puts scenario no 2 at the forefront, with the DC day 9?

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Mario to the Rescue …

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6 responses to “Mario to the Rescue …”

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