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XMFSinchiruna (27.60)

USD: The Long View

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December 17, 2008 – Comments (11)

The decline in the USD in recent days from 90 to below 80 marks a move of historical significance, and in the context of the crisis interventions by the Fed and Treasury, create a worldwide crisis of confidence in our greenback:

Look an the volume and open interest charts below as well... they suport the view that the recent rally was an anamoly through and through, and that the return to prior lows  and ultimately lower still is technically inevitable.

11 Comments – Post Your Own

#1) On December 17, 2008 at 12:06 PM, XMFSinchiruna (27.60) wrote:

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#2) On December 17, 2008 at 12:13 PM, XMFSinchiruna (27.60) wrote:

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#3) On December 17, 2008 at 12:17 PM, XMFSinchiruna (27.60) wrote:

Look at how the USDX hhas crashed through the 50 day moving average and even interim support at 80 just in a matter of days.

This is an epic move in the reserve currency of the world, and defines, in my opinion, the incoming chapter of the ongoing global financial crisis.

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#4) On December 17, 2008 at 1:19 PM, RainierMan (74.44) wrote:

Seems like more and more people are saying we've hit a turning point for the dollar (down).

In my real life portfolio, I have gold and silver, and it's been nice to own lately.  

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#5) On December 17, 2008 at 2:05 PM, Harold71 (22.27) wrote:

Sinch,

Any opinion on the gold/oil ratio?  It's certainly moved up...from about 6 to 20.  Could make a run to 30, but it would then be time to swap gold for oil, traditionally, for less risk. 

I guess I'm a little surpised oil is still dead in the water with this big dollar move.

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#6) On December 17, 2008 at 2:59 PM, DemonDoug (48.37) wrote:

oil FTW

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#7) On December 17, 2008 at 3:26 PM, binv271828 (< 20) wrote:

I only wish I could have picked UDN with the DX at 88 instead of 73 like did back in May. Oh well :)

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#8) On December 17, 2008 at 4:07 PM, ThoughtfulFool (< 20) wrote:

As of this morning, this is what my TA advisor says about the dollar index:

"The index did not move above a daily high and broke the 1/3 to 3/8 retracement level.  This puts a great deal of doubt in the ability of the Dollar to move much above the last high.  In other words the next strong move up could end the intermediate term rally in the dollar.  Coming back to 50% of the range up is not unusual but not leaving a space between the last high after a 50% extension of that is a sign of weakness. Moving below 50% other than just marginally would also put doubt into resuming an uptrend.  Remember the last high in November was at 1/3 of the range down from the 2001 high.  We were looking for this rally to top between 1/3 and 3/8 of that high.  Move back up would allow for the normal time of distribution.  I really doubt there is much more downside and if there is it would indicate the possibility of a lower high but still quite close to the November high.  Using a stop of braking a daily high is far to large and being at the obvious support of 50% and the September high is strong support and unless today is a small range day taking most of the profit is a valid strategy.  If you played a partial position strategy at 3/8 then the rest can come off here.  A counter trend move up would be likely even if the trend were down.  I’d rather see the trading from this point than risk profit.

[chart]

"Yes, that is a pattern of trend for a top.  But there are only two waves up and tops in the index trend to take more time than the 37 calendar days this has run from high to high (Oct 28 to December 4th).  It is a pattern of trend for a top of intermediate term nature but not a strong probability to change the uptrend."

 

I really put a lot of faith in Bill McLaren, but I think he has been wrong about the this chart, and still is.  ("not a strong probability to change the uptrend").  It has broke every support level he (and others) have stated including (today) the 50% level.  The uptrend of the dollar is finished, I believe.  The downtrend will accelerate until a capitulation (chart wise).  Long term, I believe we could see 40-45 on the DXY.

 

Great posts, Sinch.  Thanks for keeping us informed about this coming crisis.  (Seems the media hasn't taken much notice of this yet.)

 

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#9) On December 17, 2008 at 4:14 PM, ThoughtfulFool (< 20) wrote:

As of this morning, this is what my TA advisor says about the dollar index:

"The index did not move above a daily high and broke the 1/3 to 3/8 retracement level.  This puts a great deal of doubt in the ability of the Dollar to move much above the last high.  In other words the next strong move up could end the intermediate term rally in the dollar.  Coming back to 50% of the range up is not unusual but not leaving a space between the last high after a 50% extension of that is a sign of weakness. Moving below 50% other than just marginally would also put doubt into resuming an uptrend.  Remember the last high in November was at 1/3 of the range down from the 2001 high.  We were looking for this rally to top between 1/3 and 3/8 of that high.  Move back up would allow for the normal time of distribution.  I really doubt there is much more downside and if there is it would indicate the possibility of a lower high but still quite close to the November high.  Using a stop of braking a daily high is far to large and being at the obvious support of 50% and the September high is strong support and unless today is a small range day taking most of the profit is a valid strategy.  If you played a partial position strategy at 3/8 then the rest can come off here.  A counter trend move up would be likely even if the trend were down.  I’d rather see the trading from this point than risk profit.

[chart]

"Yes, that is a pattern of trend for a top.  But there are only two waves up and tops in the index trend to take more time than the 37 calendar days this has run from high to high (Oct 28 to December 4th).  It is a pattern of trend for a top of intermediate term nature but not a strong probability to change the uptrend."

 

I really put a lot of faith in Bill McLaren, but I think he has been wrong about the this chart, and still is.  ("not a strong probability to change the uptrend").  It has broke every support level he (and others) have stated including (today) the 50% level.  The uptrend of the dollar is finished, I believe.  The downtrend will accelerate until a capitulation (chart wise).  Long term, I believe we could see 40-45 on the DXY.

 

Great posts, Sinch.  Thanks for keeping us informed about this coming crisis.  (Seems the media hasn't taken much notice of this yet.)

 

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#10) On December 18, 2008 at 1:07 AM, kaskoosek (79.63) wrote:

TMFSinchiruna

 

 

I think I love u.

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#11) On December 18, 2008 at 10:49 AM, XMFSinchiruna (27.60) wrote:

USD is taking a breather from its decline today as the Euro fiats experience some reckoning of their own. This is not a sea change in the present decline trajectory, IMO, but just a rest.

http://www.forbes.com/2008/12/18/briefing-europe-midday-markets-equity-cx_vr_1218markets11.html?partner=yahootix

I'm no technical guru, but I don't see support on the USDX chart until 72.5 or so after punching through 80 so convincingly yesterday.

kaskoosek

CAPS is all about the love. :)

 

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